What happened
Shares of Esports Entertainment Group (GMBL) were soaring over 25% Thursday morning after Citron Research said video game retailer GameStop (GME 1.07%) should buy the company.
So what
The mania surrounding GameStop stock was renewed after the retailer announced its CFO was resigning. Although it didn't give a reason for the departure, it said there were no disagreements over the video game shop's financials.
Shares of GameStop more than doubled on the news yesterday and were up another 45% in morning trading today. Now with Citron calling for the retailer to buy Esports Entertainment, stock traders are rallying around its shares too.
Image source: Getty Images.
Now what
Esports Entertainment is an online gambling platform that focuses on the growing esports market. It has been spending a lot of time signing up various professional sports teams across all major league sports to become official esports tournament partners.
Citron's argument is that buying Esports Entertainment would help GameStop transition away from its retail stores, which are becoming less important as more gaming goes online. Activist investor Ryan Cohen has advocated GameStop sell off most of its stores.
Citron was a noted short-seller, but recently had a change of heart during the GameStop rally after he lost 100% of his position in the video game retailer and decided offering positive stock news was a better business model.
