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In a surprising rebound, shares of video game and console retailer GameStop soared during trading as lunch neared on Wall Street. GameStop, which has struggled on the stock market due to consistent losses and and an outdated business model, has seen its shares rise by a staggering 70% today as it gains ~$30 in value per share since trading started today.
GameStop Coming Back? Share Price Recovery Stuns But Is Short-Lived
Given its balance sheet and operation woes, GameStop became a darling of the short-sellers as total shorted shares as a percentage of GameStop's shares stood at a staggering 103% at the end of December 2020 - a near all-time high in a market that has also seen dogged opposition to any positive prospects bout Elon Musk's electric vehicle darling Tesla Inc. Since then, this percentage has risen to 140% of shorted shares as a percentage of total shares.
As if recent increases in its share prices weren't enough, today's dramatic rise is sure to have short-sellers drenching in a sweat if they haven't chewed off all of their fingernails. For reference, from the start of this year to the close of trading yesterday, GameStop's shares have 18.84 - 43.03 appreciated by a staggering 128% percent already after they closed at $18.84/share at end of December and $43.03 at the close of trading yesterday.
Yet, this gain pales in comparison to what the company's investors and management will no doubt describe as a miracle that has taken place today. As of 13:00 EST, GameStop was trading at $72.61/share, having gained $29.58 during the course of four hours of trading, as the stock gained more today than it had managed to gain through the course of this month and the start of 2021.
Naturally, as is the case with most real-world events, miracles are rarer than cold hard reality. And for GameStop, this 'miracle' seems to have originated due to a tussle between Citron Research and commenters on the Reddit subreddit r/WallStreetBets.
Short Seller To Abstain From Commenting On GameStop As It Reports Harassment Of Minor Children From Stock Owners
Given the multitude of its troubles, the fact that GameStop has become the center of attention of short-sellers isn't hard to wrap one's head around. But one short seller, Citron Research, seems to have been the target of some serious harassment from folks who do not believe that GameStop's shares will depreciate in the future.
In a letter posted on its Twitter page, Citron Research has stated that it will no longer be offering any comments on GameStop shares due to encountering "serious crimes such as harassment of minor children". Citron's managing editor Mr. Andrew Left has stated that he will be reporting these events to federal law enforcement agencies and that he expects that the government will protect firms from similar events in the future.
Naturally, this does not indicate that the group will be pulling out of its short position in NYSE:GME, with the tone of the letter implying that "walking away from a stock" insinuates no further comments on it instead of liquidating any position. The Twitter account on which the editor shared his letter is a backup account as Citron's primary account seems to have been hacked, as implied by the new account's bio which reads, "Temporary account while Twitter goes through records of hacking."
GameStop's hurrah on the open market seems to have been short-lived though since in between the 20 minutes that elapsed between 13:00 EST and 13:20 EST, the share price fell by $14.89, as it lost roughly half of the day's gains. Since then, the price has moved slightly upwards, but whether it will regain today's high point seems uncertain.
