The individual investors who recently joined GameStop Corp. I’m making a comeback this week after the company’s stock in distress increased by more than 90% in the last two days, putting the stock on track for the best weekly performance on record.
For weeks now, members of Reddit’s popular WallStreetBets forum have been promoting GameStop, encouraging others to take action at the video game retailer and start betting on alcohol. Several forum posts noted that GameStop bearish short sellers’ bets were high.
The short interest rate, which indicates the interest of investors who bet that a share will decrease in value, has risen around 138% of the free value of the share this year, according to FactSet data. This makes it the second shortest-selling company on the New York Stock Exchange and Nasdaq Inc., according to Dow Jones Market data. This has led some Reddit users to predict that the stock could rise rapidly if short sellers should cover their bets by buying shares if the stock rises sharply in value.
This week, this forecast seems to take shape after news of the changes to the GameStop board sent shares.
On Monday, the company said it had reached an agreement to add co-founder Chewy Inc. Ryan Cohen and two former GameStop board directors.