GameStop, a U.S. video game retailer, has recently found itself in the middle of the market spotlight. Its stock has been touted by retail investors, putting the squeeze on Wall Street's short-sellers.

Let's review the sequence of events in this fight between GameStop (GME) buyers and short-sellers first. It all started with a letter from Ryan Cohen, an investor in GameStop and founder of online pet-supply retailer Chewy.

Cohen, a billionaire, wrote to GameStop on November 16, urging the company to focus on online sales if it wants to stay afloat. Two months later, GameStop added Cohen to its board.

Investors largely viewed the January shake-up as a positive step when shares gained by nearly 13 percent and continued to climb in the following session. Users of social site Reddit followed up and members of the subreddit WallStreetBets also joined in on January 13, praising the move and encouraging each other to squeeze short-sellers out of their bearish positions. When markets closed on January 14, GameStop doubled its share price.

Research institute Citron then released a video, saying the company's stock price is overvalued and will crash at $20. Meanwhile, an increasing number of posts on WallStreetBets urged traders to hold off selling and continue to keep the rally alive.

Wall Street hedge funds went into the market including Melvin Capital and Citadel shorting the stock as the fundamentals of its business did not really support such a valuation. Retail investors on WallStreetBets fought back. Social media bigwigs and investors, even Elon Musk joined in, publicly supported the short squeeze and said the 160 percent short coverage on GME is too much.

More liquidity was poured into the market, and the price surged to $325 at last Friday's close. Some online brokerages including interactive broker Robinhood pulled the brakes on GME, placing trade restrictions either restricting short-selling or raising guarantee requirement to trade the stock.

Regulators also stepped in as the U.S. Securities and Exchange Commission (SEC) said it was monitoring the extreme price volatility of the market.

Three questions to ask while this is still ongoing.

Question 1 - What makes this time different?

Short selling itself is not a new phenomenon in the market. Usually it's by institutional investors betting against an overvalued stock or a company suspected of fraud. If the bet is wrong, eventually markets will correct it.

Tesla is an example. The company proved it can be a market leader and short sellers got squeezed after a series of the better-than-expected earnings release. But GME is a loss-making company with a relatively outdated business model. It is not a sector leader nor has it unveiled any new business initiatives. Day traders and retail investors followed opinions on WallStreetBets without looking at the company's fundamentals.

In this case, social media has become the most effective tool to unite buyers despite the company fundamentals. In a post-pandemic world, the gap between the rich and poor has only grown with monetary policy eased in the U.S.

The younger generation might feel a disruptive method is needed to bridge the inequality and some might want to challenge the status quo, feeling that Wall Street is privileged and unfair.

Such an up-well from social media was neglected by Wall Street. As the dominant force of the capital markets and representatives of social elites, they are used to do things in a certain way. But this time, right or wrong, they are against society

Question 2 - Who gets the most profit? Assuming this is not a zero-sum game and everyone profits, who profits the most?

Ryan Cohen for instance with his entry price now has already made about 20X and about a billion on paper while the profit for new entrants will be largely limited and subject to the future rationality of the market.

If big investors suddenly sell their stocks, retail investors will end up with a huge loss. If the company's business remains stagnant, the situation for retail investors will be even more dangerous after the company releases its next earnings. Will Ryan Cohen, Elon Musk distribute their wealth to retail investors? We don't know.

Question 3 - Should regulators intervene?

Yes, they should. All markets need rules for fair competition. Financial markets evolve along with social-economic development, and rules and regulations need to be adjusted accordingly and reflect such changes on a fair basis.

The SEC has already stepped in, saying they will closely review actions taken by regulated entities that may disadvantage investors or otherwise unduly inhibit their ability to trade certain securities.

The show still goes on and it seems that the bet on Reddit is now shifting from GME to Silver. What it reflected is likely more of the U.S.' deep-rooted social problems and inequality. In the meantime, after attention fades things will go back to their principles. A good company with solid business will survive and vice versa.