GameStop Air Force Lost $1.6 Billion Overnight
Share price of game retailer GameStop (GME-US) continued to skyrocket, and the short-seller lost US$1.6 billion in a single day last Friday. The cumulative loss this year has reached US$3.3 billion. Even so, the Air Force still did not intend to disarm and surrender. Instead, it increased its short position. According to the latest information from S3 Partners, the short GME stock increased by 883,000 shares in the past seven days.
GameStop shares closed up 92% on Tuesday (26th) to US$147.98, another record high, with a market value of US$10 billion. After the market was mentioned in a Twitter post by Tesla CEO Musk, it surged by nearly 60%, reaching more than $250 at one time.
GameStop has always been the number one target for short snipers. Although the stock price has risen as high as 757% from January to date, S3 Partners data shows that currently GameStop still has 138% of its outstanding shares sold short.
This “century short squeeze” was caused by the short-selling agency Citron Research (Citron Research) saying on Tuesday (19th) that GameStop’s share price is only worth $20. This remark caused strong dissatisfaction among US netizens and called on retail investors on the stock forum Reddit Bought GameStop to resist the Air Force, and even shouted “At least wait until more than $1,000 per share to sell GameStop.”
The next day, GameStop’s stock price began to rise steadily, from 57% to 70%. The stock price also went from the lowest opening price of US$20.42 on the 20th to a final closing price of US$65.01 on the 22nd, causing short positions to lose US$1.6 billion overnight. The Big Bear Citron Research was therefore silent, saying that it would no longer comment on the stock.
Loop Capital analysts said that this stock has completely divorced from the fundamentals, which is largely driven by retail investors and individual investors, many of whom trade stocks and options on the Robinhood platform.
In fact, GameStop has had poor performance over the years and its stock price has been sluggish. Due to the convenience of online shopping, consumers are turning to online shopping for electronic games, especially online game sales platforms such as Sony, Nintendo, Microsoft, and Steam, which have hit GameStop and traditional retailers’ businesses severely. The stock price has been falling since 2016. The situation worsened after the outbreak, and physical stores were forced to suspend business.
GameStop declined to comment on this air-squeeze battle that even Wall Street is paying attention to, only that it will continue to digitally transform. Earlier this month, GameStop announced that Ryan Cohen, the founder of Chewy, the largest pet electronics retailer in the United States, had joined the board of directors, which has also become a source of confidence for retail investors to pursue GameStop.