Update: After the publishing of this article, the GameStop story has taken wild turns. You can catch up with that with our handy reading list.
In an unusual event, video gaming company GameStop’s shares touched a record-high price of $76.76 — thanks to a battle between Redditors and short sellers.
Just to give you an idea of this bizarre growth, GameStop’s shares were trading between $3-$4 this time last year.
All of this began when short selling company Citron was scheduled to explain its stance on Gamestop on a live stream last Thursday. However, the company said it had to cancel the event because of too many hacking attempts on its Twitter account.
Meanwhile, members of r/WallStreetBets started to buy GameStop shares for cheap prices, forcing Citron to buy its own quota of stocks that it needed to return to its lenders. This resulted in a tug-of-war that drove the company’s stock up.
GameStop had a tough 2020 because of it sgeneral business direction as a company with several physical locations selling video games and the pandemic. According to a Bloomberg report, the company planned to close more than 450 of its retail locations and move its business online towards the end of the year. Earlier this month, GameStop refreshed its board with three executives from pet ecommerce company Chewy.
In an interview with Bloomberg last week, Citron’s managing partner Andrew Left said that after this unprecedented surge, the electronics company’s shares will return to the $20 price mark soon.
If you want to know more about the battle between Citron and r/WallStreetBets, Ars Technica has a handy explainer.