The shares of GameStop Corp. they rose last Monday to $ 150, and fell at a loss on the day in another volatile session as loyalists and short sellers clash over the value of the video game retailer.
GameStop GME,
shares flew up 144% higher to an intraday record of $ 159.18 before Monday, while they stopped several times, and fell red on the day briefly before recovering to gains below 20%. More than 126 million shares were exchanged hands at noon on a stock with an average daily volume of less than 9 million shares in the last 52 weeks.
In January alone, stocks soared to 400% amid a battle involving a retailer that has been plagued by the COVID-19 pandemic and the online purchase of video games. GameStop has been an estimate on Reddit’s WallStreetBets message board, where hundreds of posters have been pushing to buy the shares after investors betting on the chain raised interest rates by more than 100%.
See also: “The mechanics of the market are breaking down,” Jim Cramer says of GameStop’s madness
Short sellers have been targeting GameStop stocks as the pandemic adds to problems related to online sales. Famous short salesman Andrew Left of Citron Research released a video Thursday afternoon explaining why GameStop should be a $ 20 share, then he withdrew and claimed he and his family had been threatened. Shares began to rise in the middle of the month with a 57% rise on January 13, with five of the next seven trading days recording daily gains of 10% or more despite a disappointing preliminary earnings report from the retailer. Shares ended 51% on Friday after Citron canceled a planned live broadcast citing attempted harassment and piracy.
Ihor Dusaniwsky, head of predictive analytics at financial analysis and technology firm S3 Partners, which specializes in analyzing short-term sales data, told MarketWatch that GameStop is in a unique position on the short side .
“We are seeing a reduction in older shorts that have suffered massive market losses in their positions, but we are seeing new shorts coming in and using equity loans that are available to start new shorts in the hopes of a possible reversal of this stratospheric stock price movement, ”said Dusaniwsky.
“This keeps short-term overall shares in GME relatively flat even though there is a significant short-term reduction in a considerable number of existing short sellers,” Dusaniwsky continued. “Like the revolutionary war, the front line of troops falls under a carabiner fire, but is replaced by subsequent troops.”
Dusaniwsky said net sellers ’net market losses are $ 6.12 billion this year, including a loss of $ 2.79 billion on Monday, when shares rose more than 60 percent.
For more information: Reddit moderator at GameStop adds: “They hate that you played by the rules and still won”
GameStop has not posted any news matching the upload and has not responded to a MarketWatch request for comment. The Securities and Exchange Commission declined to comment Monday on possible investigations.
Earlier this month, GameStop admitted that sales for the quarter fell more than 25% and fell short of expectations. In the last two quarters, the company’s losses have expanded significantly, after a quarter ended in 2020, when GameStop reported an adjusted loss of $ 1.61 per share compared to the 7 cents stake in the profits it had reported in the previous year’s quarter.
Analysts expect adjusted earnings to increase 12% to $ 1.42 per share during the January-ended holiday-driven period, with an advanced 5% income to $ 2.292 billion, compared to period of the previous year.