It appears that the Reddit army’s beloved meme stock, GameStop, is the subject of yet another price rally, causing short-sellers to lose an additional $1.9 billion in two days.
The video game retailer’s shares soared by more than 100% on Wednesday, even prompting temporary trading halts due to sporadic volatility levels. However, according to analytics firm S3 Partners, those betting against GameStop may not be in a very favorable position, given that the sudden price rally also brought with it $664 million in market-to-market losses.
The frantic buying continued on Thursday, as GameStop stock surged by as much as 84% in intraday trading, before closing at 19% gains. The intraday moves on Thursday dealt another blow to short-sellers, with losses exceeding $1.19 billion, according to S3 Partners’ calculations. Come Friday morning, GameStop shares climbed by a further 31% to just above US$140 on the open, as retail investors continued to pump the stock on Reddit and other social media platforms.
Analysts brought attention to a recent tweet by GameStop board member Ryan Cohen, who posted a McDonald’s ice cream cone that may lead traders to believe it was a cryptic message to proceed with buying. With the latest gains in GameStop stock, short-sellers have lost a combined $10.75 billion; however, despite the extensive losses, investors continue to bet on the video game retailer’s demise, as the number of shorted Gamestop shares within the last week soared by 15% to 1.97 million.
Information for this briefing was found via S3 Partners and Bloomberg. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
The Economy That Cried Wolf (Of Wall Street)
(title card concept stolen from Martin Scorsese and Jesse Hawken) This past March, when the...