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GME Stock: GameStop’s Dizzying Rally Continues Today

It looks like some investors are hot to prove GameStop (NYSE:GME) short-sellers wrong, as GME stock surged 40% in premarket trading on Monday after gaining 51% on Jan. 22.

Retailers walk past a GameStop (GME) store in New York City, New York.
Source: Northfoto /

Four months ago, GME stock was around $6 a share. It looks set to open today at more than $93. Despite the gains, the video game reseller has been a target of short-sellers who have questioned just about every aspect of the brick-and-mortar retailer’s business.

Among the loudest short-sellers has been Citron Research, which said on Friday that it would stop commenting on the stock following the actions of “an angry mob.” “We are investors who put safety and family first and when we believe this has been compromised, it is our duty to walk away from a stock,” Citron managing partner Andrew Left wrote in a letter that day.

GME shares are currently the single-most shorted stock, according to data from FactSet. More than 138% of the shares are now borrowed and sold short.

GME Stock Continues to Get Wall Street’s Attention

Wall Street’s doubts gained further traction in recent days. Telsey Advisory Group knocked down its rating on GameStop by two notches. Citing a disconnect between GameStop stock’s valuation and its business fundamentals, the firm took the rating to underperform from outperform. The firm’s price target is now $33 a share while the broader analyst median is $12.50.

“The sudden, sharp surge in GameStop’s share price and valuation likely has been fueled by a short squeeze, given the high short interest, and, to a lesser degree, speculation by retail investors on forecasts for the new gaming cycle and the involvement of activist RC Ventures,” Telsey analyst Joseph Feldman wrote in the note to clients on Monday.

Meanwhile, CFRA Research analyst Camilla Yanushevsky reiterated her “sell” rating on Jan. 15. She attributed most of the recent gains to a short squeeze after Chewy (NYSE:CHWY) co-founder Ryan Cohen was added to GameStop’s board, Bloomberg reported.

On the date of publication, Robert Lakin did not have (either directly or indirectly) any positions in the securities mentioned in this article. 

InvestorPlace contributor Robert Lakin is a veteran financial writer and editor, following fintech, agtech and property tech startups.

Article printed from InvestorPlace Media,

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