The over 642% surge in the shares of GameStop since January 12 has come as a shock to many Wall Street veterans.

The ongoing bullish rally in the shares of the American video game, consumer electronics, and gaming merchandise retailer, GameStop Corp (NYSE: GME) has taken a new turn in the past 24 hours. As reported by CNBC, tweets from Social Capital’s Chamath Palihapitiya and Tesla Inc (NASDAQ: TSLA) Chief Executive Officer Elon Musk.

Contributing to the ongoing duel between a certain group of short-sellers who are bearish on the stock and another group of retail investors organized in a Reddit chat room dubbed “WallStreetBets” with two million subscribers, Elon Musk tweeted “Gamestonk!!” drawing reference to the Reddit page. Palihapitiya also revealed in a tweet that he bought the GameStop call options with the anticipation of an increment in the shares in the near future. The tweets from these Wall Street juggernauts have contributed to boosting the shares performance of GME as seen today.

Read Also:   The Biggest Winners of the US Elections? Crypto Prediction Markets

To top the wild upswing in the shares of GameStop, the stocks closed 92.71% on Tuesday to $147.98. The pre-market rally has been more impressive with an additional 81.11% surge to $268.00. At the time of writing, the stock is 51% up. The company now has a valuation of $10.32 billion for the first time since it was established in 1984.

Analysts believe that the more the sellers short the stock, the more the bulls buy up more of the shares.

“The retail order flow in the options are supercharging the short squeeze,” CC Lagator of Options AI said. “The call buyers essentially use the market makers’ hedges as leverage. As the stocks go higher, more stock is bought to cover for increasing short deltas. It’s a market inefficiency and it eventually ends when those that have sold the calls are over-hedged for a stock no longer rising, and then need to actually sell stock to stay delta neutral.”

Read Also:   Bitfinex Repays Tether $750 Million Loan, Ending Crypto Market FUD

Michael Burry Warns against GameStop Shares Meteoric Blast

The over 642% surge in the shares of GameStop since January 12 has come as a shock to some Wall Street veterans including Michael Burry who has maintained a bullish disposition on GME since 2019. Per a Bloomberg report, GME’s meteoric rise in recent days is “unnatural, insane, and dangerous.” Burry wrote:

“If I put $GME on your radar, and you did well, I’m genuinely happy for you. However, what is going on now – there should be legal and regulatory repercussions. This is unnatural, insane, and dangerous.”

Just like Burry, many see the pumped up valuation of GME as a subtle form of unacceptable market manipulation that may end in a catastrophic burst. Burry confirmed in an email shared with Bloomberg that he is “neither long nor short” on GameStop even though his firm Scion Asset Management has a 3.3% stake in the video game retailer.

Read Also:   Tezos Adds Support for Private Transactions and DeFi Contracts

next Business News, Editor’s Choice, Market News, News, Stocks

Benjamin Godfrey

Benjamin Godfrey is a blockchain enthusiast and journalists who relish writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desires to educate people about cryptocurrencies inspires his contributions to renowned blockchain based media and sites. Benjamin Godfrey is a lover of sports and agriculture.


Download MAXBIT Android App, Your best source of all crypto news!
Google Play

Source link


GameStop Shares Coast to New ATH as Stock Bulls Outnumber Short-Sellers

by Tracy Mitchell
Choose A Format
Poll
Voting to make decisions or determine opinions
Story
Formatted Text with Embeds and Visuals
List
The Classic Internet Listicles
Meme
Upload your own images to make custom memes
Video
Youtube, Vimeo or Vine Embeds
Audio
Soundcloud or Mixcloud Embeds
Image
Photo or GIF
Gif
GIF format