Individual investors who recently joined GameStop Corp. are having a victory lap this week, after the company’s troubled stock has risen more than 90% in the past two days, putting the stock in pace with its best weekly performance ever recorded.
For weeks, members of Reddit’s popular WallStreetBets forum have been promoting GameStop, encouraging others to take stock from the video game retailer and start placing bullish bets. Several forum posts noted that the sellers’ downside bets on GameStop were at high levels.
The interest sold, which indicates the interest of investors who bet that a share will fall in value, fluctuated around 138% of the share’s free float this year, according to FactSet data. This makes it the second best-selling company on the New York Stock Exchange and Nasdaq Inc., according to Dow Jones Market Data. This caused some Reddit users to predict that stocks could rise quickly if short sellers suddenly had to hedge their bets by buying back the shares if the shares rose in value.
This week, the forecast finally seemed to take shape after news of changes to GameStop’s board pushed the stock up.
On Monday, the company said it struck a deal to add Chewy Inc. co-founder Ryan Cohen and two former executives to GameStop’s board.