GameStop may be the stock that everyone on Wall Street loves to hate, but there was no indication of that during last week’s rally on Wall Street. The video game and consumer electronics merchandiser’s stock soared by almost 70 percent on Friday alone. Its Friday high reached $72.88, or 69.4 percent higher than the previous close. Because of high volatility on Friday, trading was halted numerous times during the day. Shares closed at $65.01, or 51.1 percent higher than its Thursday close. Total gains for the week topped 100 percent.
The GameStop rally was first triggered at the beginning of the week when company officials announced that Ryan Cohen, Chewy’s co-founder, was going to join its board of directors. The announcement set off a short covering, prompting hedge fund investors and others to shield their wagers against the stock. But, retail investors also fueled the rally. By the end of the day on Friday, 194 million GameStop shares had exchanged hands. That’s at least eight times GameStop’s 30-day average volume in trading, which is usually around 23.8 million.
According to Factset, over 138 percent of GameStop’s float shares are sold short, making it the most shorted in U.S. stocks.
Meanwhile, Citron Research is predicting that shares will quickly fall back to $20 per share, calling it a “poker game.”
Just four months ago, GameStock shares stood at $6 per share. Total gains since then are up by 245 percent. The company is headquartered near Dallas, Texas, and operates more than 5,500 stores worldwide.