Retail Traders Reignite 2021 Short-Squeeze Strategy as GoPro Surges 50% and Krispy Kreme Jumps 12%

Retail traders have reignited a 2021-era short-squeeze strategy, this week pushing heavily shorted stocks like GoPro (GOOGL) and Krispy Kreme (DNUT) to sharp gains after they were spotlighted on Reddit’s WallStreetBets forum. GoPro surged nearly 50% at the market’s open, while Krispy Kreme climbed 12%, driven by coordinated buying efforts among retail investors seeking to exploit weak short interest positions. The move mirrors the GameStop (GME) frenzy of 2021, where retail traders targeted hedge funds that had shorted the stock, forcing cover-ups and driving prices to unsustainable levels [1].

The current wave of speculation is centered on companies with elevated short interest and limited institutional oversight. WallStreetBets users have shifted focus from prior meme stocks like AMC and GME to lesser-known names, rotating into companies with market values between $50 million and $2 billion and share prices under $20, as outlined by CNBC’s criteria for potential meme trades [4]. This approach minimizes liquidity risks while maximizing leverage against short sellers. One WallStreetBets user explicitly endorsed the strategy, stating, “60k DNUT YOLO,” a shorthand for “just do it” that underscores the emotionally charged nature of the trades [2].

The pattern has intensified as individual investors continue to pour capital into U.S. equities. VandaTrack data reveals $155 billion in inflows into stocks and ETFs during the first half of 2025, surpassing the $110 billion seen during the 2021 meme stock boom [3]. This surge aligns with broader market risk appetite, evidenced by the S&P 500 hitting its 11th all-time high in 2025. While institutional participation contributes to the trend, speculative retail activity remains a dominant force, with traders prioritizing momentum over fundamentals.

The S&P 500’s gains highlight the duality of market dynamics: institutional investors bet on macroeconomic resilience, while retail traders deploy aggressive, high-risk tactics. For example, GameStop closed at $24.20, down 0.23% from the prior day, despite lingering short interest. Similarly, AMC and Robinhood saw modest declines, reflecting the cyclical nature of meme stock movements. These trades are not driven by earnings reports or corporate disclosures but by social media-driven sentiment and the pursuit of short-covering profits [1].

The strategy’s reemergence also signals a maturation in retail trading behavior. Unlike 2021, when platforms like Robinhood faced regulatory scrutiny, today’s participants operate in a more structured environment. However, the core objective remains unchanged: to exploit short sellers by driving prices upward until forced cover-ups exacerbate gains. This has led to a new generation of meme stocks, with GoPro and Krispy Kreme serving as recent case studies in how social media can distort market fundamentals [2].

Analysts remain divided on the sustainability of these rallies. While the short-squeeze mechanism is well-documented, the lack of intrinsic value in these stocks raises concerns about prolonged volatility. The S&P 500’s record highs suggest broader confidence, but the speculative fervor could amplify downside risks if market conditions shift. For now, the GameStop playbook continues to shape retail strategies, proving that retail trading remains a potent, if unpredictable, force in modern markets [1].

Source: [1] [Traders are targeting heavily shorted stocks, echoing the 2021 GameStop strategy] [https://coinmarketcap.com/community/articles/6881011d9761e50e761ae21c/] [2] [Reddit traders hunt shorted names again] [https://coinmarketcap.com/community/articles/6881011d9761e50e761ae21c/] [3] [VandaTrack data on retail inflows] [https://coinmarketcap.com/community/articles/6881011d9761e50e761ae21c/] [4] [CNBC’s criteria for meme stocks] [https://coinmarketcap.com/community/articles/6881011d9761e50e761ae21c/]