GameStop shares spike another 50 percent amid short squeeze

GameStop shares spike another 50 percent amid short squeeze

GameStop shares soared another 50 percent early Monday, fueled by an epic short squeeze that has sparked an eye-popping rally in the video-game retailer’s stock this month.

The early Monday surge — which recently left the stock up 48 percent at $96.73 — follows a Friday rally that had left the shares 51 percent higher.

Aggressive short sellers in the stock — some of them hedge funds with relatively big positions — have been forced to cover their bets, buying up the shares and sending them higher. That’ because retail investors in online forums like Reddit have encouraged each other to continue buying the stock, pointing to the outsized wagers against it.

Short interest in GameStop shares on Friday stood at 102 percent of the shares outstanding, making it one of the most shorted companies on the New York Stock Exchange and the Nasdaq, according to S&P Global Market Intelligence.

The epic tug-of-war over the mall-based retailer took an ugly turn last week when a prominent short seller in the stock, Andrew Left of Citron Capital, said he had been harassed by GameStop investors and reported their personal attacks to the FBI and other authorities.

“These are not just name-calling and hacking but have extended to the harassment of bullying of minor children,” Left wrote in a letter he posted on Citron’s website, referring to his family. 

On Thursday, Citron suspended a livestream event to explain its short position on GameStop, saying there were attempts made to hack its Twitter account.

GameStop has soared by more than 245 percent in January alone, capping a rally that has lifed the shares from from $4 last July.

The stock began its climb in August when founder Ryan Cohen took a 9 percent stake in the Texas-based chain for an average price of about $8.40 a share. Cohen, who heads up investment firm RC Ventures, also joined the board this month, sending the shares up again. His stake is about 13 percent now.

“The Chewy believers believe he’ll be successful,” Wedbush analyst, Michael Pachter told The Post last week.

But Wall Street is warily watching the battle, with some downgrading GameStop. Pachter’s price target for the retailer is $16 a share.

“The sudden, sharp surge in GameStop’s share price and valuation likely has been fueled by a short squeeze, given the high short interest, and, to a lesser degree, speculation by retail investors on forecasts for the new gaming cycle and the involvement of activist RC Ventures,” Telsey analyst Joseph Feldman said in the note on Monday.

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John Angulo

John is a well experienced hockey player and has won many championships. He intends to build a bright career in the media industry as well. He is a sports freak who loves to cover the latest news on NHL.

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