Is GameStop (NYSE:GME) stock going to $60 or to $20? That is the question fueling massive share price moves, heated internet debate and a cult of GME stock followers. As GameStop tacks on another 7%, what do investors need to know?
GameStop has essentially become the darling of internet trading communities, further aided by a rise in users on platforms like Robinhood. The company once looked ready to follow in the footsteps of Blockbuster. Now, thanks to an activist investor and a loyal following, some see it as the next Amazon in e-commerce.
The story all starts with Chewy (NYSE:CHWY) founder Ryan Cohen, who picked up an activist stake back in September 2020. Since then, he has reinvigorated the GME stock community, promising to take on Amazon head on. More recently, GameStop acknowledged its turnaround plans, naming Cohen and two other Chewy executives to its board of directors. As we wrote last week, investors are hopeful that GameStop can actually lean into an e-commerce model, or potentially strengthen direct-to-consumer sales. Video gaming as an industry remains popular, setting up the logic for the GME transformation.
However, the real moves in GME stock today come from Citron Research.
Earlier this week, Citron promised a livestream where the firm would share five reasons GameStop was headed back to $20. One promised topic of discussion was the role of short interest, which many see as responsible for major pops. Citron initially slated the livestream for Wednesday at 11:30 a.m. Eastern. However, so as not to interfere with Inauguration Day festivities, Citron said it would reschedule to this morning…
Too many people hacking Citron twitter, will record and post later today. $GME going to $20 buy at your own risk
— Citron Research (@CitronResearch) January 21, 2021
Except Citron changed its mind, ultimately cancelling its livestream due to hacking concerns. The firm maintains via Twitter (NYSE:TWTR) that $20 is the downside target, but bulls are fired up.
Did Citron Just Give GME Stock a Pass?
What should investors understand about the current situation here? Well, to fans of GME stock, the canceled livestream seems to be the perfect way to prove bulls are right. Social media users are expressing doubt over the hacking concerns. Instead, they believe that Citron no longer wants to take on the GameStop crowd. However, if the firm does deliver on its recorded message, its criticisms could take shares in the opposite direction.
For now, the Twitter spat is fueling already fast-moving GME higher. Whether or not Citron surrendered, do your own research here. GameStop has been flying high on hopes and dreams, and investors should be sure to understand what is it at stake.
On the date of publication, Sarah Smith did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Sarah Smith is a Web Content Producer with InvestorPlace.com.