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Stocks of video game retailer GameStop Corporation (NYSE: GME, GME:US) have been frenetically rallying this week, surging over 51 per cent on Friday, January 22, alone. While the stock took off earlier this month after it announced the appointment of Chewy Inc founder Ryan Cohen into its board of directors, the latest surge was fueled by a few other events.
Let’s dive in to analyze the factors that drove GameStop stocks upward this week.
GameStop Short-Sellers vs Bullish Traders
GameStop stocks surged this week amid a trading war between short-sellers and bullish investors. In other words, while some borrowed and sold the stock ‘short’ expecting its price to plummet, a crowd of other traders invested in it to lift its value.
The trading war between GameStop stock short-sellers and bulls reached a whole new level on Thursday when short-focused stock commentor Citron Research founder Andrew Left slammed the gaming stock on Twitter.
©Kalkine Group 2021
Mr Left tweeted a video in which he not only ridiculed GameStop’s bull buyers but also shared five reasons why he believes the stock is set to tank. The Citron executive editor added that the video was supposed to be a live telecast but he had to change his plans due to multiple attempts to hack into his Twitter profile.
On the other side of the trading match were commentors on stock market-oriented Reddit forums who slammed Left’s bearish position and remained mostly bullish on the GameStop stock.
Amid all the chatroom drama, GameStop stocks faced a circuit-breaker trade halt around 12:40 pm EST, though trading resumed after a while.
Where Does GameStop Stock Stand?
As bullish investors piled on to thwart the short-sellers, GameStop stocks shot up to a record high of US$ 76.7 during intraday trading on Friday. Over the past one week, between January 15 and 22, the gaming stock has surged by over 83 per cent.
The news of Ryan Cohen joining the company’s Board fueled the stock price surge in January to a large extent. GameStop shares currently hold a year-to-date growth of over 245 per cent.
