A YouTuber famous for playing horror games now owns more of GoPro Inc. (GPRO) tradable stock than any Wall Street fund.

The action-camera maker has gained 50% since the start of the month, the best performance in the Russell 2000 index of small U.S. companies.

Yet, shares remain nearly 99% below their 2014 record.

Markiplier Lit The Fuse, Starman Changed The Story

The excitement began when Mark Fischbach, better known as YouTube star "Markiplier," disclosed an 8.5% stake in GoPro.

Fischbach accumulated 13.5 million Class A shares, making him the company's largest outside shareholder.

GoPro jumped 46% on Aug. 31 as retail traders followed him into the battered stock.

But Markiplier's arrival only set the stage.

On Sept. 1, GoPro agreed to merge with privately held Starman Optical in a transaction that will radically change what shareholders own.

GoPro investors are set to receive $285 million in aggregate cash, or $1.14 per share, subject to a working-capital adjustment.

They will also retain roughly 10% of the combined public company.

The agreement would repay GoPro's approximately $92 million of debt at closing. It would also add Starman's U.S.-made optical transceivers to the product portfolio.

Those components move data through fiber-optic networks and are critical to AI data centers.

The combined company also plans to pursue defense, government, robotics and aerospace customers.

A Short Squeeze Did The Rest

GoPro's heavy short interest amplified the move.

Short sellers borrow shares and sell them, betting they can buy them back later at a lower price. When the stock rises instead, they have to buy shares to close their positions and limit losses.

That buying can push the price even higher. Traders call this a short squeeze.

According to FINRA data, 30.58 million GoPro shares were sold short as of Aug. 31.

That was 20.2% of the public float, the shares freely available to trade.

A Rally Built on Sand?

The stock's explosive performance should not be confused with an operating turnaround.

GoPro's second-quarter revenue fell 31% year over year to $105 million. Camera sales declined 38% to roughly 291,000 units.

The company lost $51 million, compared with $16 million a year earlier. Adjusted earnings before interest, taxes, depreciation and amortization were negative $29 million.

Rising memory-chip prices, driven by the AI data-center buildout, squeezed margins further. Competition from DJI and Insta360 took market share.

There is one brighter spot.

Subscription and service revenue rose 11% to $29 million, representing 28% of total sales. The subscriber attachment rate reached a record 69%.

Still, those recurring revenues were not enough to offset collapsing hardware demand and mounting losses.

Even after the rally, the stock is down about 8% this year.