As of December 1, 2020, the price of GameStop (GME) stock was just under $ 19 per share. As of this writing, the stock price stands at $ 148 per share, or 680% return in just under two months. But that is even before the pre-weighted trading is weighed, in which the company reached a peak of over 128% return.
What it means? Mainly that the stock probably “suffers” from a squeeze short, after it is one of the stocks that has been the most scratched on the market. Some? According to FIS Analytics, the stock is short of at least $ 2.2 billion, representing 20% of the company’s market capitalization.
Just two weeks ago on Wednesday, the shortlisters lost $ 800 million on the stock. The stock rose more than 90% yesterday, after billionaire investor Chams Polypitya said last night that there was an option on the stock as he believes it will continue to rise.
It also shows the gap between institutional investors, those who made the short position, and Robinhood investors, who are pushing the stock up. Why are they pushing? A tweet from Elon Musk, CEO and owner of Tesla (TSLA), who simply wrote “GameStunk.” That was enough to generate stock on the stock among Robinhood users and the like.
Gamestonk !! https://t.co/RZtkDzAewJ
– Elon Musk (@elonmusk) January 26, 2021
The new investors, as they like to call the young and inexperienced users of the Robinhood platform and the like, have already created some anomalies in the market in the last year. The most memorable case is of the share of the car rental and leasing company, Hertz (HTXGQ), which in May last year announced bankruptcy, but at the same time its share flew at over 100% due to the gamble of the young market. Needless to say, today its rate is lower since then.
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