The 4 main reasons that GameStop stock became the target of a Reddit forum with more than 2 million members

In early 2019, GameStop's stock value fell off a cliff: It dropped from about $16 per share to under $4, and it stayed in that range for just shy of two years.Even in 2020, while the video-game business (including GameStop) had huge gains during coronavirus lockdowns, GameStop's stock price remained in the gutter. As recently as August — just under five months ago — the largest video-game retail chain had a stock value of less than $5 per share. But in the second half of 2020, with big financial names like Michael Burry and Ryan Cohen buying up shares in the ailing retailer, and new game consoles from Sony's PlayStation and Microsoft's Xbox, things started looking up. The company's share value gradually increased until it outright surpassed its pre-collapse value in late 2020. By early January, there were a lot of signs that buying GameStop stock was a good idea. By mid-January, users of a Reddit forum named r/WallStreetBets began buying up stock in the company — the more they bought, the higher the price went, in a kind of modern bull raid. The group has over 2 million members, and uses its collective buying power to move stock prices.The reason WallStreetBets traders gambled on GameStop had less to do with the company's business model, and more with embarrassing institutional short sellers — including Citron Research managing partner Andrew Left.Left and r/WallStreetBets had feuded in the past over his short-sells on Palantir Technologies and Chinese carmaker Nio, per Bloomberg. Just before GameStop exploded, Left posted a nearly seven-minute long video explaining why he expected shares to crash. He further provoked r/WallStreetBets by calling GameStop buyers suckers at this poker game.Members of r/WallStreetBets ridiculed Left and used his video as fuel to keep buying GameStop, Insider's Ben Winck reported.Left has since ended all comment on GameStop after saying he was harassed, and said his hedge fund covered the majority of its GameStop short positions at a 100% loss.Read more: Jon Gray is the future of Blackstone. 50 insiders reveal how the superinvestor consolidated power, elbowed out rivals, and is remaking the firm in his golden-boy image.Like so many memes before it, buying shares of GameStop spread from person to person through Reddit and other social media communities.Markets writers define meme stocks as those that experience wild swings after online posts lead a mass of individuals to buy or sell. These movements to stock price have little to do with company financials or news. GameStop's buyers likely aren't true believers in the future of physical video game sales — they're buying the stock to make a big return and, perhaps more importantly, to demonstrate power.The prevailing theme of posts on WallStreetBets is collective power — enough collective power to push back on the hedge funds and analysts that predicted GameStop's stock would never reach such heights.There's another theme as well: A grand bet, to hold on tight and not sell, no matter how high the stock's value goes. GME will stay going until WE sell. Do not f---ing sell boys, $1,000 was the original target but nothing is stopping this from getting to $5,000 but us.Ryan Cohen, the cofounder and former chief executive of the pet-product firm Chewy, accumulated over 12% of GameStop by December 2020. Cohen hoped to expand GameStop's e-commerce arm and rescue it from years of slumped sales due to increased competition from digital game stores. On January 11, before r/WallStreetBets went all-in on buying GameStop, Cohen announced two former Chewy lieutenants would join the gaming store's board of directors. GameStop shares jumped following the news after Cohen promised to overhaul the struggling retailer with digital sales. The Chewy cofounder has reportedly made a 1,700% return from his 2020 investment of $76 million after GameStop's improbable rally. Cohen is now a billionaire, according to Forbes.

The 4 main reasons that GameStop stock became the target of a Reddit forum with more than 2 million members

1. GameStop's stock price hit historic lows, at one point trading under $4 per unit, for much of 2019 and 2020. But things began to look up recently.

2. The Reddit forum WallStreetBets has a chip on its shoulder for short-sellers - Andrew Left in particular.

3. For the lols - GameStop is the first major "meme stock."

4. The co-founder of Chewy bought a 12% stake to keep the struggling GameStop afloat, which caused a Wall Street rally even before this recent surge in value.