Individual investors who recently joined GameStop Corp. stacked, taking a victory round this week after the struggling company’s shares rose more than 90% over the past two days, bringing the stock into the pass for its best weekly performance.
Members of Reddit’s popular WallStreetBets forum have been running GameStop for weeks, encouraging others to pick up shares of the video game retailer and start betting. Several posts on the forum noted that the clumsy GameStop bets from short sellers were at high levels.
Short-term interest rates, indicating that the interest of investors betting that a stock will fall in value, hovered around 138% of the stock’s free-float this year, according to FactSet data. This makes it the second shortest company across the New York Stock Exchange and Nasdaq Inc., according to Dow Jones Market Data. Some Reddit users predicted that the stock would rise rapidly if short sellers suddenly had to cover their commitment by buying back shares should the shares suddenly rise in value.
This prediction apparently finally took shape after the news of changes to GameStop’s board made the shares climb.
The company said Monday it has entered into an agreement to add Chewy Inc. co-founder Ryan Cohen and two former executives to the GameStop board.