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GameStop posted $ 1.53 billion in market capitalization on Friday, more than the entire company’s value on Jan. 12, 2021
Images of Spencer Platt / Getty
GameStop
stocks sold above 2007 high Friday in a move that one short selling expert believes could kill investor interest in shortening the seller videogame. Critical volatility led to a brief halt to trade.
Citing earlier pressure where a moderate proportion of older short sellers covered their positions as the stock went up a few weeks ago, said Ihor Dusaniwsky of S3 Partners Barron’s he believes today’s action has lost signal-to-market losses for even newer short sellers promising a price decline.
He believes that, “both older and newer minutes will reconsider the conviction in this trade – more likely, the short trades will be killed without a chance of reinstatement. ”
Shares of GameStop (ticker: GME) entered as high as $ 72.88 on Friday – the highest intraday rate on record, according to Dow Jones Market Data, before settling at near $ 65.01. The previous stock high closed, at $ 63.30, on Christmas Eve in 2007, when Santa Claus shook his sleigh with Nintendo Wii consoles.
On Friday, 193.9 million shares of hands changed, the highest number for the stock. GameStop posted $ 1.53 billion in market capitalization on Friday, more than the value of the entire company less than two weeks ago, according to Dow Jones Market Data. When the stock sat at around $ 60, Dusaniwsky said short sellers were down about $ 2.96 billion in 2021, a token-to-market loss of net funding, totaling $ 1.22 billion in the 40% intraday jump.
“Brokers have been looking for stock to meet the short demand but they are coming up empty as almost all lending shares are taken down the street,” said Dusaniwsky Barron’s.
Retail investors on social media sites like Reddit’s “WallStreetBets” forum have been tossing the stock for months, betting on Chewy co-founder and 13% stakeholder Ryan Cohen the declining retailer can transform into a major e-commerce player. The company said earlier this month that Cohen and two other former Chewy executives will join their board, prompting nose pops for the stock amid short-term high interest in the air.
In addition to marking the stock explosion and urging other users to hold on to shares, some forum members mocked Andrew Left at Citron Research, an active short seller aimed at on GameStop stock recently.
On Thursday, Left released a YouTube video explaining the reasons why it believes the stock will soon fall to $ 20. It also revealed that it was betting against the stock.
Left’s argument covered some of the points made Barron’s earlier this month. That article was published when the stock was trading around $ 18. Our timing was terrible, but these gains came without real signs of such a reversal. In fact, the results of holiday sales, reported on Jan. 11, worse than some analysts expected.
Since he posted the video, Left told Barron’s that his
Twitter
the account has been flooded with users reporting on his posts and trying to guess a password, effectively locking his account. Forward backup Twitter account, Left a statement stating that the group ‘s actions went beyond name – calling and investigation efforts and included “serious crimes such as child harassment.”
“We are investors who put safety and family first and when we think this has been put at risk, we have a duty to walk away from stock,” Left said.
The onus is now on Cohen and company to deliver the kind of transformation that investors are signaling. Turning a slow-based retailer into an e-commerce giant is no small task, even for someone like Cohen who has experience of competing with
Amazon.com
(AMZN) in the pet supply industry.
Without an unprecedented move, the future looks bleak for the brick-and-mortar videogame vendor. The game industry continues to move toward games being downloaded directly on consoles and free-to-play titles that cut out the GameStop core business model almost entirely .
Write to Connor Smith at [email protected]