Shares of GameStop Corp ( GME ) saw a decline of 2.09% during pre-market hours following an initial surge driven by social media activity as per Benzinga Pro.

The stock’s initial rise was triggered by a post from Keith Gill, also known as “Roaring Kitty,” who shared a mysterious image on X, formerly known as Twitter. This post, made on Dec. 25, featured a wrapped ‘Christmas Present' and sparked speculation among retail investors, leading to a 7.68% increase in after-hours trading on Robinhood, with shares reaching a peak of $33.50. However, the stock later declined as investors took profits.

Meme stocks like GameStop ( GME ) often gain momentum through viral popularity and speculative trading, which are heavily influenced by social media and active retail communities. While these stocks can offer significant gains, they are also known for their high volatility and the risk of substantial losses.

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Despite the recent surge in activity, GameStop’s stock holds a consensus price target of $10 from analysts, with Wedbush maintaining this target since Sep. 11. The average price target of $9.33 suggests a potential downside of 71.10% from current levels, according to the latest analyst ratings.

The recent social media-driven surge in GameStop ( GME ) shares is reminiscent of the 2021 meme stock phenomenon, where retail investors, fueled by platforms like Reddit, drove up the prices of certain stocks, including GameStop ( GME ).

Meme stocks gain their fame through viral popularity and speculative trading, fueled primarily by social media buzz and active retail investor communities. While they can deliver quick, substantial gains, they also carry extreme volatility and the potential for heavy losses.

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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.

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