It encompasses the best and the worst of the financial markets in 2021. I’m referring to Gamestop (NYSE:GME), of course, as rebellious Reddit traders have successfully short-squeezed GME stock into the stratosphere.

In the story that refuses to die, Gamestop continues to generate a groundswell of support from Redditors of all stripes. It’s Main Street’s revenge against Wall Street, a David-versus-Goliath story for finance nerds everywhere.

Apparently, some of the Reddit Apes have been doing whatever it takes to keep short sellers from getting their hands on GME stock shares. Some of them have even switched brokerage accounts, allegedly, in order to temporarily hide their holdings.

It’s fascinating to watch that story unfold, but let’s not forge that we’re trading a real-life business here. Moreover, that business has an upcoming event that all Gamestop traders – Apes and otherwise – need to pay attention to.

A Closer Look at GME Stock

No matter how you slice it, the short-squeeze mob beat the hedge funds at their own game.

GME stock fell briefly below $4 in the summer of 2020, a slightly more innocent time when Reddit was an obscure message-board platform and hardly anyone talked about Gamestop.

Then came the meme-stock phenomenon in early 2021, and all bets were off (except for r/WallStreetBets).

If Gamestop was unprofitable at that time, it didn’t matter. This was war, and sometimes logic is secondary in the heat of battle.

Amazingly, in late February of 2021, short sellers who bet against GME stock lost $1.9 billion in two days.

By late May of that year, people/institutions shorting Gamestop sustained a cumulative $6.7 billion worth of losses in 2021.

The only thing that seems to be working in the bears’ favor, is the stock’s hard resistance level at $300.

Therefore, it’s probably not a bad idea to take profits if/when GME stock breaches $300 again.

The Longs Are Strong

Before we get to the (pardon the pun) game-changing upcoming event, it’s important to consider what’s actually been driving the Gamestop share price higher.

Financial wizard and InvestorPlace contributor Mark R. Hake really opened my eyes to what the data shows in this regard.

Citing a Securities and Exchange Commission (SEC) report that tries to explain the Gamestop saga, Hake quoted a myth-busting observation.

According to the SEC, the Gamestop share short-covering “was a small fraction of overall buy volume, and… GME share prices continued to be high after the direct effects of covering short positions would have waned.”

I concur with Hake conclusion from this assessment: for the most part, hedge funds weren’t responsible for pushing up the Gamestop share price when they bought back their short positions.

Rather, GME stock was primarily boosted by huge volumes from long traders.

The takeaway here is that there’s real conviction among the Apes. And if there’s strength in numbers, then the long positions are certainly strong positions.

Get Ready for This

Okay, I won’t tease the topic any longer.

After the closing bell rings on Wall Street, Gamestop will report its fiscal third-quarter earnings results on Dec. 8.

I suspect that some retail GME stock traders might not know or care about this event, but they ought to.

After all, a big earnings miss could swing the share price lower very quickly, and thereby shake some Apes out of the proverbial tree.

Here are some numbers to watch for. First, Gamestop is expected to post a quarterly per-share earnings loss 52 cents.

So, at least to a certain extent, Wall Street will forgive the company for being unprofitable.

Here’s where things could get problematic. Gamestop’s third-quarter revenue is expected to total $1.19 billion.

That would represent a year-over-year increase of 18.3%. Can Gamestop match that prediction?

The odds might not be favorable on this one. According to FactSet, Gamestop beat revenue expectations the past two quarters.

However, the company also missed Wall Street’s revenue forecasts for nine consecutive quarters prior to those two beats.

If I were an oddsmaker, I’d wager on the side of caution on Dec. 8.

The Bottom Line

Like it or not, the Redditors are winning the trading game. Trying to stand in their way isn’t recommended.

Moreover, the SEC’s data tends to suggest that the Apes are capable of moving stock prices simply through their long positions.

This all bodes well for GME stock.

Nevertheless, it’s perfectly fine to stay out of the trading game on Dec. 8, and take profits at $300 if the Apes decide to revisit that price target.

On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.