One of the most legendary short squeezes of all time is still underway as short sellers can’t seem to find the top.
Traders of GameStop Corp. (NYSE: GME) stock have been locked in an epic battle for months. The leading players are the short seller firm Citron Research and the retail traders on the Reddit thread r/wallstreetbets.
On Friday, the Reddit group seemed to win the battle, but the war was only just beginning.
With only 70 million shares outstanding and a stock price of $20 per share, GameStop had a market cap of $1.4 billion on January 12. After a surge of retail buying, the stock price doubled to $40 by January 21.
Citron Research is a notorious short seller and research firm responsible for bringing Nikola Corporation (NASDAQ: NKLA) to its knees in 2020. It has maintained that GME stock will drop below $20 again.
But on Friday, January 22, a major short squeeze happened. Despite GME only having 70 million total shares, over 200 million traded hands. The share price spiked from $40 to $77 and closed the day near $65.
Monday marked another massive squeeze; the stock price continued to climb as high as $160 per share.
Tuesday’s session was so volatile that trading on GME was halted five times.
The breaking news desk for the all-in-one trading platform StockToTrade sent out the following alert at 3:46, just 14 minutes before the close:
- GME wow all the way down to 131 and then back to 145, I will say watch this after-hours … this has the potential to squeeze higher without getting halted!! GME will probably explode higher after the bell, especially if we break thru $150.
The stock closed near $150.
Then just after the market closed, Tesla, Inc. (NASDAQ: TSLA) CEO Elon Musk tweeted one word, “Gamestonk!!”
The price soared even higher, topping out near $250 in after-hours trading. A 1,150% increase in two weeks.
At the close of trading today, GameStop had a market cap valuation of $10.5 billion. rapid-results coronavirus test on March 17. On March 18, it opened at around . It went up to the s in After-hours trading added in another $7 billion to that total.
This is an excellent lesson in how a short position can add up to infinite losses. GameStop was worth $1.3 billion at the end of 2020. Short sellers have lost over $5 billion so far in 2021.
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