Video game retailer GameStop (GME) has been on fire lately. The shares gained roughly 100% over a two-day period last week, following news that Chewy (CHWY -5.35%) founder and activist investor Ryan Cohen and two of his associates would join GameStop's board of directors. The short squeeze continued today, pushing GameStop shares up another 10%.
Noted activist short-seller Andrew Left of Citron Research contributed to the run-up today. Citron had posted on Twitter that it would present a livestream detailing five "reasons GameStop buyers at these levels are the suckers at this poker game." The event was originally booked for 11:30 a.m. EST on Wednesday, but was rescheduled so it didn't have to compete with President Joe Biden's inauguration. Then, the livestream event was unceremoniously canceled.
A subsequent post on Twitter noted, "Too many people hacking Citron twitter, will record and post later today. [GameStop] going to $20 buy at your own risk." Left eventually posted a hastily shot video on Alphabet's YouTube, but the effort was widely criticized for containing factual errors and rehashing many of Citron's old arguments.
Last week, Wedbush analyst Michael Pachter noted the significant short interest in GameStop at 138% of the shares available for trading, helping set the stock up for its massive short squeeze.
GameStop stock initially rallied on the positive development. As the price of the shares continued to rise, investors who had bet against the stock bought shares to cover their short positions, further boosting the stock. This drove additional short-sellers out, with the rising demand fueling further share price gains.
High trading volume typically accompanies a short squeeze, and today was no different. More than 55 million GameStop shares traded hands today, which is roughly five times the average daily volume recorded in the month of December.