Trading in Gamestop (GME) shares was temporarily halted this afternoon, after the price spiked almost 70% in an apparent squeeze on short-sellers.
The video game stock soared by 69.4% to a high of $72.88, pushing its total gains for the week past 100%. The stock was temporarily halted for trading due to volatility mid-session, and closed at $65.01. GME was trading at around $6 just four months ago.
The story behind the spike involves short seller Citron Research and subscribers of a Reddit community called WallStreetBets.
Citron had predicted that Gamestop shares will drop to $20, a call the aforementioned Reddit community apparently disagreed with. What started as a relatively minor pushback against the call quickly snowballed, as more users piled in to buy and word of what was going on spread beyond the original community to the rest of Reddit and the internet in general.
What appears to have started as genuine disagreement with a short call morphed into a movement against the practice of short-selling itself. Initial posts rebutting Citron’s position were quickly drowned out by those from users with seemingly no other desire than seeing the short-sell backfire spectacularly.
Citron initially fought back, tweeting that those buying the stock were “the suckers at this poker game”. Ultimately though people power seems to have won out, with Citron’s managing partner Andrew Left announcing that the company would no longer be commenting on the stock, blaming an “angry mob” for the company’s decision.