The subreddit named r/WallStreetBets took Citron's comment both as a joke and an opportunity. Citron released a video on Thursday saying that it expected GameStop's stock price to drop back to $20 in time, while also saying something called a "short squeeze" was not occurring.Ī short squeeze occurs when a stock that's commonly shorted begins to rise, leading to a cascade effect where shorters, in turn, rebuy the stock as it climbs to capitalize on the rise. That's where Citron Research enters the situation. Given GameStop's precarious position for some time, with the video game industry shifting away from retail and toward digital, the company's stock rise was a surprise – especially so for investors who "shorted" GameStop's stock, which is to say they gambled on GameStop's stock value dropping. RELATED: GameStop Board of Directors Adds Pet Food Billionaire
Having Cohen placed on GameStop's board caused GameStop's stock to rise nearly 250%, and that's where things start getting complicated. Cohen's support of GameStop and his addition to the board has been seen as a positive move that could help the retailer improve its online presence. This rise was caused by the popular Chewy CEO Ryan Cohen joining GameStop's board. The fiasco starts with a natural rise in GameStop's stock value just recently. It involves a YouTube video, an awkward prediction, a Reddit community trying to make a point, and a stock exchange phenomenon called a "short squeeze." As silly as it sounds, it may conclude with reported criminal activity. That GameStop's stock would rise significantly is in itself a surprise, but truly it's the story of how it happened that's most baffling. In completely off-the-wall news, Friday saw the stock price of struggling retailer GameStop leap a total of 69% before trading was halted.
0 kommentar(er)
