U.S. markets closed
  • S&P 500

    4,471.37
    +33.11 (+0.75%)
     
  • Dow 30

    35,294.76
    +382.20 (+1.09%)
     
  • Nasdaq

    14,897.34
    +73.91 (+0.50%)
     
  • Russell 2000

    2,265.65
    -8.52 (-0.37%)
     
  • Crude Oil

    82.66
    +1.35 (+1.66%)
     
  • Gold

    1,768.10
    -29.80 (-1.66%)
     
  • Silver

    23.35
    -0.13 (-0.54%)
     
  • EUR/USD

    1.1606
    +0.0005 (+0.05%)
     
  • 10-Yr Bond

    1.5760
    +0.0570 (+3.75%)
     
  • GBP/USD

    1.3751
    +0.0074 (+0.54%)
     
  • USD/JPY

    114.2000
    +0.5230 (+0.46%)
     
  • BTC-USD

    61,021.46
    -370.94 (-0.60%)
     
  • CMC Crypto 200

    1,464.06
    +57.32 (+4.07%)
     
  • FTSE 100

    7,234.03
    +26.32 (+0.37%)
     
  • Nikkei 225

    29,068.63
    +517.70 (+1.81%)
     
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

GameStop closes up 51% after chaotic day of trading

·Markets Reporter
·2 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

GameStop (GME) shares closed 51% higher at $65.01 each on Friday after an apparent crush on short-sellers. The stock was temporarily halted for trading due to volatility mid-session after spiking a whopping 70%.

The story behind the massive spike has to do with short seller Citron Research’s recent prediction that shares of the video game retailer will drop to $20 a piece. Over the last week, the stock has done just the opposite. Here’s why:

On Tuesday, Citron’s managing partner Andrew Left announced he would list five reasons why the shares will plunge. Reddit users called WallStreetBets (WSB), a sub-Reddit community on the platform, pushed back on Left’s call and apparently helped create a massive short squeeze on the stock. A short squeeze forces short sellers to buy in order to forestall bigger losses, sending the stock price much higher.

“I’ve never seen such an exchange of ideas of people so angry about someone joining the other side of a trade,” said Left in a YouTube clip on Thursday. He went on to list the reasons why he thinks the stock will go down to $20/share.

The reaction from retail investors, Reddit users and the like have sent the stock up more than 100% over the last week.

On reddit, WSB users on Friday were celebrating the stock’s squeeze to record highs.

Reddit user reaction to $GME short squeeze
Reddit user reaction to $GME short squeeze

Adding fuel to the fire this week, TV personality and co-founder of The Street, Jim Cramer, has been tweeting about the crush on shorts.

The fight over GameStop appears to have come to a head on Friday, when Left said he would stop commenting on the stock.

“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,” Left wrote in a letter posted on Twitter.

The past 10 days marks the most volatile period for GameStop during its history, according to Bloomberg data.

Ines covers the U.S. stock market. Follow her on Twitter at @ines_ferre

Arrival, the latest EV company set to enter the public markets

NIO earnings: Chinese EV maker beats on revenue in the 3rd quarter

'If people can buy shoes and clothes online they'll definitely want to do it with cars:' Shift Co-CEO

Morgan Stanley raises S&P 500 price target for 2021, with earnings growth as a key driver

Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, LinkedIn, and reddit.