Photographer: Luke Sharrett / Bloomberg
Photographer: Luke Sharrett / Bloomberg
In the battle between the short-selling Citron Research and an army of Reddit-laden day traders, The seemingly endless rally of GameStop Corp. at a record level it gave the winners the fellows, though not without controversy.
GameStop’s 105% gain to Friday comes after doubling a week earlier and marks the most volatile 10-day period on record, according to data compiled by Bloomberg. The stock was shut down twice in New York, after rising 70% to $ 73.09.
The parabolic growth of GameStop, which came against a background of constant and high interest and increased volume, showed the difference between retail bulls and bears betting on a quick return to reality.
On Friday, when the short seller said he would stop commenting on the actions of an “angry crowd”, there was a reaction against Citron of some Reddit voice users on his opinions about GameStop.
“We are investors who put safety and family first, and when we think this has been compromised, it is our duty to move away from a stock,” Citron’s managing partner Andrew Left wrote in a letter. Friday.
The statement came a day after Left said in a YouTube video that “he has never seen such an exchange of ideas from people so upset that someone joins the other side of a transaction,” referring in part to Reddit users who have been particularly vocal on the social networking site looking to promote their positive views on the video game retailer’s stock.
GameStop is up 287% in January so far, with daily 10-day average volatility peaking in the nearly two decades the stock has been trading, according to data compiled by Bloomberg. Friday’s strong growth fueled its market value of more than $ 5 billion.
GameStop representatives did not immediately return an email requesting comments.
As the saga unfolded this week, GameStop fans clashed with Citron after the short seller criticized the actions in a tweet on Tuesday and made plans for a Twitter Inc. livestream the next day. The event was initially pushed back for the inauguration of President Joe Biden and then again on Thursday due to trying to hack the short seller’s Twitter account.
On Thursday afternoon, Left posted a video on YouTube discussing the company, detailing five reasons why he believes the company’s shares in Grapevine, Texas, will “return to $ 20.” This represents less than a third of the $ 72.82 that the shares traded on Friday at 12:43 pm, when the shares triggered a volatility stop.
Wall Street analysts have largely remained silent amid the recent volatility of the stock. CFRA Research analyst Camilla Yanushevsky reiterated its sell rating on January 15 and attributed most of last week’s gains to short pressure after the activist investor and Co-founder of Chewy Inc. Ryan Cohen has been added to the GameStop board.
Bearish bets remained constant, with 140% of available GameStop shares currently sold short, according to data compiled by S3 Partners. The bears lost more than $ 1.74 billion this year, according to the financial analysis firm.
“While older existing shorts have covered some of their positions due to a short loss based on profit losses, there is a queue of new short sellers who want to receive short exposures in GME after its recent training,” he said. said Ihor Dusaniwsky, director of S3 director of predictive analysis, said by e-mail.
– With the assistance of Luke McGrath
(Share-based trading was suspended twice after the action in the second subparagraph)