Gamestop Upswing Affects 104 ETFs

GameStop Corp. (GME) closed out Monday up nearly 31% at $123.14, a significant bump from its open at $97.11.

GME is held by 104 ETFs, which together own a total of 6.7 million shares.

The ETFs with the most GameStop Corp exposure include—not surprisingly, given it is probably the original meme stock—the Roundhill Meme ETF (MEME), with a weighting of 3.60% followed by the Defiance Digital Revolution ETF (NFTZ), with a weighting of 3.06%. The SoFi Social 50 ETF (SFYF) has a 3.05% weighting to the stock.

With 1.75 million shares, the iShares Core S&P Mid-Cap ETF (IJH) tops the list in terms of total shares held, by a wide margin, holding more than three times the total number of shares than second place SPDR S&P Midcap 400 ETF Trust (MDY). Not far behind sits the Vanguard Total Stock Market ETF (VTI), with 415K shares.

Over the last 30 days, the ProShares UltraPro MidCap400 (UMDD) has enjoyed the largest boost as a fund holding GME stock, jumping 6.99%. The ProShares Ultra MidCap400 (MVV) and the VictoryShares USAA MSCI USA Small Cap Value Momentum ETF (USVM) trailed it, with gains of 5.04% and 4.77%, respectively.

Of the 104 ETFs holding GME, the 36 plain vanilla cap-weighted funds represent the largest portion. Meanwhile, growth ETFs holding the stock numbered 13 and multifactor ETFs numbered 12.

About The Company

GameStop made headlines in January 2021, when a subgroup of Redditors short-squeezed the stock. At one point, 140% of GME's public float was sold short, causing the stock price to soar to over $500 per share—more than 30 times its trading price of $17.25 at the beginning of the month.

Controversy followed when brokerage service Robinhood halted the buying and selling of GME, leading traders and regulators alike to accuse the company of market manipulation. The move prevented small traders from buying and selling GME stock while hedge fund managers and institutional traders still had access.

GME is now classified a meme stock by many, meaning it enjoys a cultlike following and hype but doesn't necessarily have the business fundamentals to justify its trading price.

GameStop's business model is built around in-person buying and trading of video games, consoles and collectibles, which many consider to be outdated. Yet its lowest price in the last calendar year has been $77.58 per share.

BlackBerry, Inc (BB) is another example of a meme stock; BlackBerry's digital devices were widely used throughout the 2000s, but basically fell off a cliff once Apple and Samsung devices took over the market. However, the company still has a market cap of $5 billion and has traded as high as $20.17 in the last 52 weeks.

GME's spike in price could be the result of its fourth-quarter earnings report and call that took place on March 17. Ownership was open about the fact that the company's business model has to change, and announced its partnership with Immutable X, a layer 2 protocol the company will work with to release a series of affordable Ethereum NFTs (nonfungible tokens) by July 2022. 

In December, GameStop announced it has more than $1.4 billion in cash on hand, giving the company plenty of resources to expand its offerings.