Shares of GameStop (GME) rocketed higher at market open today continuing the battle between retail investors and instutional investors.
GameStop, a brick-and-mortar video game retailer, has been a popular short target on Wall Street. In fact, more than 138% of its float shares had been borrowed and sold short, the single most shorted name in the U.S. stock market, according to FactSet citing the latest filings.
On Jan. 11, news broke that activist investor and Chewy co-founder and former CEO Ryan Cohen is joining GameStop’s board. The stock jumped higher on the announcement on hopes Cohen would drive a change in strategy at the retailer.
The jump triggered a rush of short covering from hedge funds and traders who bet against the stock. When a shorted stock trades sharply higher, short sellers would have to buy back shares to cut their losses, which fuels the rally further.
Meanwhile, GameStop has also been a hot topic in online chat rooms, Twitter and Reddit as some retail investors and day traders aim to push shares higher and squeeze out short sellers.
One post on the popular “wallstreetbets” Reddit Monday morning said “IM NOT SELLING THIS UNTIL AT LEAST $1000+ GME.” And this post has already more than 1,100 comments.
Citron Research, a vocal GameStop short seller, said Friday it would not be commenting on GameStop any longer because of attacks from the “angry mob” that owns the stock. Citron said there were too many people hacking Citron’s twitter account on Friday and canceled a live stream where it was going a detail five reasons why the stock will go back to $20.
Telsey’s 12-month price target is $33.