Shares of GameStop Corp.
Friday afternoon were extending a recent surge higher, which was putting the videogame retailer on track for its best monthly gain, up over 220%, in its history. The historic surge in shares of the company, which went public in 2002, comes as an army of traders on a popular social platform Reddit have been striving to drive values higher, according to a Bloomberg report, even as short-seller Citron Research has attempted to make a case why valuations for GameStop make it a sell rather than a buy. However, a planned livestream hosted by Citron, intended for Wednesday originally, was cancelled and Citron has complained about “hacking” of its livestream events and its Twitter account recently. A report in Bloomberg News referred to Citron’s technical issues as a backlash from the Reddit community that is rabidly bullish about GameStop. Shares of GameStop originally began a parabolic rise last week and the upsurge was attributed by some to a short squeeze, where investors who are betting that the stock price will fall in value are forced to buy shares they have borrowed in their bearish bets, which can have the effect of amplifying the stock’s rise. Market participants also see the rally in GameStop as evidence of a bubble forming in segments of the market, with the Federal Reserve and government providing liqudiity and support for the COVID-19-stricken financial market and maintaining interest rates at or near 0%–a recipe that bears have said has encouraged speculative investments. GameStop has had a powerful run due to lockdowns meant to limit the COVID spread, with more people playing videogames. Its current surge in January far surpasses its 66% surge in August, its second-best monthly gain thus far, FactSet data show.