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The action of GameStop Corp. surged past $ 150 on Monday, then fell to a loss on the day in another volatile session as loyalists and short sellers vied for the value of the video game retailer.
GameStop GME,
shares flew up to 144% higher to hit an intraday high of $ 159.18 earlier Monday while being halted several times, then fell into the red briefly the day before rebounding to gains of less than 20 %. More than 126 million shares traded hands at noon on a stock with an average daily volume of less than 9 million shares over the past 52 weeks.
In January alone, the stock has skyrocketed to 400% amid a battle involving a retailer that has been criticized by the COVID-19 pandemic and online shopping for video games. GameStop has been a darling of the Reddit WallStreetBets bulletin board, where hundreds of posters have prompted stock purchases after investors betting against the chain pushed short-term interest over 100%.
See also: “ Market Mechanics Crumble, ” Jim Cramer Says Of GameStop Madness
Short sellers have targeted GameStop stocks as the pandemic added to problems with online sales. Short seller Andrew Left of Citron Research posted a video Thursday night explaining why GameStop should be $ 20 stock, then stepped down and claimed he and his family had been threatened. Shares began to rally mid-month with a 57% rise on Jan. 13, with five of the next seven trading days recording daily gains of 10% or more despite a disappointing preliminary report on the retailer’s earnings. The stock finished up 51% on Friday after Citron canceled a live broadcast scheduled for harassment and attempted hacking.
Ihor Dusaniwsky – head of predictive analytics at financial analytics and technology firm S3 Partners, which specializes in analyzing short-selling data – told MarketWatch that GameStop is in a unique situation on the short side .
“We are seeing short squeeze on old shorts that have suffered massive mark-to-market losses on their positions, but we are seeing new shorts coming in and using any equity borrowing that becomes available to initiate new positions. short in the hope of a possible retreat of this stratospheric movement in stock prices, ”said Dusaniwsky.
“This generally keeps stocks sold short in GME relatively stable, even though there is significant short-term compression occurring in a significant number of existing short sellers,” continued Dusaniwsky. “Just like the Revolutionary War, the first line of troops fell under a hail of musket shots, but were replaced by the following troops in line.
Dusaniwsky said short sellers’ net losses to market amounted to $ 6.12 billion this year, including a loss of $ 2.79 billion on Monday, as the stock was up more than 60%.
Read more: Reddit moderator on GameStop Surge – “ They hate that you played by the rules and still won ”
GameStop has not posted any news that coincides with the peak and has not responded to a request for comment from MarketWatch. The Securities and Exchange Commission declined to comment on any potential investigation on Monday.
Earlier this month, GameStop admitted that holiday quarter sales fell more than 25% and were below expectations. Over the past two quarters, the company’s losses have widened significantly, following a late April 2020 quarter where GameStop reported an adjusted loss of $ 1.61 per share versus 7 cents per share in profits declared in the quarter of the previous year.
Analysts expect adjusted earnings to rise 12% to $ 1.42 per share for the holiday-driven end of January period, with revenue rising 5% to $ 2.29 billion per share. compared to the period of the previous year.
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