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Why GameStop's Shares Popped 28.2% on Tuesday

By Travis Hoium - Jan 19, 2021 at 5:54PM

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A short-seller couldn't stop GameStop's momentum today.

What happened 

Shares of GameStop (GME -3.56%) jumped as much as 28.2% in trading on Tuesday, despite a short-seller saying the stock will drop by nearly half. At the market's close, shares were still up 10.9% on the day. 

So what

Citron Research, which is a well-known short-seller, said in a tweet today that they will livestream five reasons GameStop buyers are "suckers" tomorrow. They even went as far as to say the stock will fall back to $20 per share "fast."

Family playing video games together.

Image source: Getty Images.

The reaction obviously wasn't what Citron was looking for today, but traders have a different view of the stock than the short-seller. GameStop's shares were up big on more than five times the average volume for the stock. 

Now what

GameStop's shares have benefited from a boom in online sales, and investors hope that a focus online will keep the company growing. But at this point, shares are up 15 times from their 52-week low, and investors are starting to see it as expensive.

That doesn't mean shares won't continue their move higher, but momentum stocks don't trade higher forever. Unless this becomes a long-term growth stock, the run could be over for GameStop any day. 

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