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Trading in shares of video game retailer GameStop (GME) was temporarily suspended on Friday as it rose more than 70 percent, thanks in part to the enthusiastic support of a group of Reddit day traders

The stock is up more than 250 percent since the start of the year and soared last week after GameStop announced that Chewy CEO Ryan Cohen would join its board of directors, CNBC reported that short seller Citron Research predicted that the Price would fall, but Reddit Board r / wallstreetbets members who piqued interest in the stock criticized Citron on the Reddit Message Board and continued to praise the stock on social media

The hype generated by r / wallstreetbets has helped create a so-called “short squeeze” on GameStop’s shares. A quick press works like this: Some investors, called shorts, are essentially betting that a company’s shares will fall These investors borrow and sell stocks from other investors with a plan to buy them back when prices go down and then return them to the original owner. The problem with shorting, however, is that the losses are theoretically infinite When a stock begins an uptrend, some short sellers give up their short sales and buy stocks at the higher price in order to return, which in turn increases the inventory and burns up any other shorts that remain in the inventory Some of them may choose to cover their own shorts

GameStop is the most slumped stock in the market, CNBC said, citing FactSet More than 138 percent of its shares will be sold short – making it a prime target for a short squeeze GameStop’s Reddit surge sparked a breaker failure, when it rose 69 percent (nice) at around 12:45 p.m. ET on Friday

Citron said Friday that there would be no more comment on GameStop stock because “the angry mob who own this stock Andrew Left, editor of Citron Research, wrote in a note to readers that the backlash was criminal activity that he was about to report to the Securities and Exchange Commission, including underage child harassment and financial crimes

According to Bloomberg, the past 10 days have been the most volatile period in GameStop stock in its history. At close of trading on Friday, GameStop was up more than 50 percent from its close on Thursday with a market cap of $ 4 billion

GameStop stock, GME

World News – FI – GameStop stock stops trading after the Reddit drama

Source: https://www.theverge.com/2021/1/22/22244900/game-stop-stock-halted-trading-volatility