The company can thank a loyal group of investors on Reddit who continue to back the stock even as many others on Wall Street have argued that the shares are overvalued and due for a sharp decline.
The stock was extremely volatile on Monday, and it was halted several times. Shares more than doubled at one point, and finished the day 18% higher.
A large number of investors have bet against GameStop recently by borrowing shares and selling them with the hopes that they can then repurchase the stock at a lower price and pocket the difference.
That’s a risky strategy: If a stock suddenly spikes higher, short sellers may have to rush en masse to buy back shares or risk losing their shirts. The more that a shorted stock goes up, the bigger the losses become if a short seller doesn’t buy back (or cover) their position. That creates the squeeze.
Left has now given up on shorting GameStop, citing harassment by the stock’s backers.
He also tweeted last week that “too many people” were hacking Citron’s Twitter feed, causing him to delay the posting of his video, which was originally planned for Wednesday. Left was not immediately available for further comment.
Some gleeful GameStop investors are even looking to cash in by selling merchandise touting the stock rally.
To be sure, GameStop does have some upside beyond the Reddit love.
GameStop announced earlier this month that same-store sales rose nearly 5% during the 2020 holiday season and that digital sales skyrocketed more than 300%.
GameStop had no comment for this story, but the firm is making some changes as it attempts to become a more digitally-focused retailer.
The company announced earlier this month that Ryan Cohen, founder of online pet supply store Chewy, is now on GameStop’s board along with two other former Chewy executives. Cohen’s RC Ventures is one of the largest investors in GameStop.
“Generally speaking, stocks with high short interest have been some of the top performers this year,” said analysts at Bespoke Investment Group in a report earlier this month.
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