Video game retailer GameStop, that store where you trip over the mall while trying to figure out why you’re at a mall, is having a great time on Wall Street. The company entered a fun market rush Friday, firing nearly 70 percent before the negotiations were briefly interrupted due to the online drama surrounding his actions.
The game store has been on the rise since recent changes to the company’s board of directors have “caused a rise” in its shares. Since then, GameStop’s value has continued to rise. Bloomberg Reports:
GameStop has risen 245% in January to date, with its 10-day average daily volatility peaking in the nearly two decades that the shares are being traded, data compiled by Bloomberg show. Friday’s surprising increase fueled its market cap above $ 4.5 billion at its peak.
This increase was partially fueled by a controversial group of online proponents, day traders on a reddit topic: r / wallstreetbets. O r / wallstreetbets traders have been loudly mobilizing behind GameStop’s actions, sparking interest in social media, with The Street noting that redditors are “responsible for pushing the stock to levels it hasn’t seen in years”.
That’s where the dramatic part comes in. Critics say online supporters are having an undue influence on the course of action. The Verge, for example, notes that the “hype generated by r / wallstreetbets helped to create what is known as” short squeeze “in GameStop stock.” A little squeeze, explains Yahoo Finance, it is essentially a pumping of the stock that “forces short sellers to buy in order to avoid further losses, making the stock price much higher”.
G / O Media can receive a commission
One of GameStop’s most outspoken critics was well-known short seller Andrew Left, who runs Citron Research, a newsletter that criticizes companies that Left considers “fraudulent” or doomed to failure. Unlike the redditors, Left has predicted the game company’s imminent downfall.
On Thursday, he released a video on YouTube in which he called the company a “retailer based in struggling shopping center” and listed the reasons why he believed the company would drop to $ 20 a share (instead, it closed down at $ 43.03 that day and rose to $ 65 at the end of the day, Friday)
The drama between the redditors and the left reached a boiling point on Friday, however, with the left claiming there were attempts to hack his Twitter account and also implying that his family was harassed in some way. On Twitter, he wrote: “We will no longer comment on GameStop, not because we do not believe in our investment thesis, but the angry crowd that owns these shares has spent the past 48 hours committing various crimes that I will hand over to the FBI, SEC and others government agencies. “
Left does not exactly have an impeccable record. After a controversial report on a Chinese real estate developer in 2012 (short sellers made a package while the company was reeling), the left was ended up banned from the Hong Kong financial market for allegedly making “false and / or misleading” statements. Early in his career, in 1994, he was also sanctioned for the National Futures Association, a self-regulatory body committed to the supervision of the country’s derivatives market, as “part of a broader investigation” about a company he worked at the time.
Markets Insider wrotes about:
While it is not yet known who will win, some indicators suggest that the bullfighting party is ending. The Relative Strength Index for GameStop’s shares – a measure of the stock’s momentum – was just below 80, after rising 10% on Thursday. Readings above 70 suggest that the stock is overbought, and the index has not fallen below that threshold since January 12.
At the moment, it is not entirely clear where the stock is going.