‘Reddit Mob’ and angry shorts sellers clash over ridiculous Gamestop stock market jump

Video game retailer GameStop, that store that you stumble upon at the mall while trying to figure out why you’re in a mall, is having a great time on Wall Street. The company launched into a bustling market on Friday, skyrocketing nearly 70 percent before trading was briefly halted due to online drama involving his action.

The game store has been on a roll since recent changes to the company’s board of directors “sparked a rally” in its stock. Since then, the value of GameStop has steadily increased. Bloomberg Reports:

GameStop is up 245% in January so far, with its daily 10-day average volatility hitting its highest level in nearly two decades, according to data compiled by Bloomberg. Friday’s skyrocketing fueled its market value above $ 4.5 billion at its peak.

This push was in part fueled by a controversial group of online supporters, day traders on a reddit thread: r / wallstreetbets. the r / wallstreetbets traders have vehemently rallied behind GameStop’s action, sparking interest via social media, with The Street noting that the editors are “responsible for pushing the stock to levels it hasn’t seen in years.”

This is where the drama comes in. Critics say online supporters have undue influence over the course of the title. The Verge, for example, notes that the “hype generated by r / wallstreetbets has helped create what is known as a ‘short squeeze’ on the action of GameStop.” A short press, explains Yahoo Finance, is essentially an increase in the stock that “forces short sellers to buy in order to prevent larger losses, which causes the stock price to rise much higher.”

One of GameStop’s most vehement critics has been well-known short seller Andrew Left, who runs Citron Research, a newsletter critical of companies Left deems “fraudulent” or doomed. Unlike the redditors, Left predicted the imminent downfall of the games company.

On Thursday, he posted a Youtube video in which he called the company a “bankrupt mall-based retailer” and listed the reasons he believed the company would soon drop to $ 20 a share (instead , it closed at $ 43.03 later today and rose to $ 65 late Friday).

The drama between the editors and the left reached a boiling point on Friday, however, with the left claiming there had been attempts to hack her Twitter account and also implying that her family had been harassed in a way. or another. On Twitter he wrote: “We will no longer be commenting on GameStop, not because we don’t believe our investment thesis, but rather because the angry mob that holds this stock has spent the last 48 hours to commit several crimes which I will entrust to the FBI, SEC and other government agencies. “

Left himself does not have an impeccable record. After a controversial report on a Chinese real estate developer in 2012 (short sellers bundled as the company was in shock), Left was finally banned from the Hong Kong financial market for allegedly making “false and / or misleading” statements. Earlier in his career, in 1994, he was also sanctioned by the National Futures Association, the self-regulatory body pledged to oversee the country’s derivatives market, as part of a “larger investigation” into a company he was working at at the time.

Markets Insider writes:

While it remains to be seen who wins, there are some indicators to suggest that the Bull Festival is over. The GameStop stock relative strength index – a measure of the stock’s momentum – was just below 80 after Thursday’s 10% rise. Readings above 70 suggest the stock is overbought and the index has not landed below this threshold since January 12.

At the moment, it is not entirely clear where the action is going.