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Stocks of gaming company GameStop Corporation (NYSE:GME, GME:US) are still on the path of a dizzying upswing, posting a surge of about 103 per cent as the markets opened on Monday morning (11 AM EST). The scrips showed no signs of slowing down while writing this and continued its ride up north.
Perched at a price of US$ 132, GameStop stocks have been riding on the ongoing Reddit chatroom war going on between bullish investors and short sellers. The debate between the two groups has reportedly triggered a short squeeze, which can often occur when a short sellers’ coverage of a stock triggers excess demand for the stock.
GameStop stocks, which were priced at US$ 18.8 apiece at the end of December (December 31), took off after it signed an agreement with activist investor Ryan Cohen’s venture capital firm RC Ventures LLC. The deal saw the Chewy Inc founder, along with two other new members, take a seat at GameStop’s Board of Directors.
Known from his success with pet health company Chewy Inc, some market experts believe that it was Cohen’s induction GameStop’s Board that may have fueled the stock’s rise.
©Kalkine Group 2021
Short Sellers vs GameStop’s Bull Investors
The chatroom battle between short sellers and GameStop’s bullish traders, which had been going on for a while, intensified last Thursday (January 21) when short-focused commentor Andrew Left criticized the gaming stock on Twitter.
In a recorded video posted on the social media platform, Mr Left slammed GameStop’s bull buyers and named five reasons why he thinks the stock is heading for the dumps. Bullish traders on stock-oriented Reddit forums, on the other side, attacked Mr Left for bearish stance and urged other commentators to go bullish on the GameStop stock.
The stocks surged over 51 per cent on Friday alone.
Media reports claim that the GameStop stock is currently soaring high above the average forecast noted by some market commentators. The stock currently holds an average trading volume of over 67 million for the last 10 days.
