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GameStop Corporation’s (NYSE:GME, GME:US) epic stock rally shows no sign of slowing down. As the markets opened on Wednesday, January 27, the video retailer saw its stocks surge by nearly 111 per cent (10:45AM EST).
Wednesday morning also brought along wild oscillations in GameStop and other such shorted stocks, causing online brokerage platforms like Robinhood Markets and Charles Schwab to face service disruptions yet again.
The Texas-based company’s feverish upswing was propelled further on Tuesday after Tesla boss Elon Musk and Canadian-American venture capitalist Chamath Palihapitiya tweeted about it.
What Did Elon Musk & Chamath Palihapitiya Say About GameStop?
Adding to the trending chatter about the gaming stock, Mr Palihapitiya tweeted on Tuesday that he purchased its February call options priced at US$ 115.
The SpaceX and Tesla founder, on the other hand, was more subtle.
Mr Musk posted a link to a Reddit chat forum named ‘Wallstreetbets’, where the short-sellers vs bullish traders war on GameStop has been raging for days, with a just one word: “Gamestonk!!”
The single-word tweeted sent GameStop’s stock price galloping even higher in the aftermarket hours on Tuesday.
©Kalkine Group 2021
GameStop’s Short-sellers Succumbing To Momentous Short Squeeze?
After making a video predicting GameStop stock’s downfall last week, Citron Research’s Andrew Left announced on Tuesday that the firm covered the most of the gaming stock’s short bets at “a loss of 100%”.
In the video posted on Tuesday, the short-focused commentor stressed that he still believes that GameStop stocks will collapse in the future. He also called out online trolls who are issuing threats against his family and company for his trade-related opinions.
New York-based Investment management company Melvin Capital also reportedly took quite a hit from going short on GameStop. A spokesperson of the company recently reported that it has closed out of its short positions on the video gaming stock after repositioning its portfolio.
Some media reports claim that short-sellers of GameStop stocks lost billions of dollars this year as hordes of bullish traders thronged online chat squeeze out their bearish bets.
GameStop stocks were value priced at US$ 18.8 apiece less than a month ago (December 31) before the company signed a deal making activist investor Ryan Cohen its board member. Cohen’s appointment news was followed by a chatroom war between short-sellers, who predicted GameStop stock to be a sink ship, and bullish traders who pushed back hard enough to send the share to record heights.
