Wall Street

GameStop shares rise 23%, driven by pressure on the shares for the second day in a row

GameStop shares rose 22.8% Thursday to a one-day record high, which has alarmed investors of the type of “short-sellers” who are borrowing shares and selling them back after their value drops. The company is thus recording the fourth consecutive day in which its share has grown, after announcing the renewal of the board of directors on Monday.

The company has agreed with activist investment firm RC Ventures to add three new members to its board, including Chewy’s founder Ryan Cohen, delighting investors who were previously bullish on the company’s stock, which rose 12.7% on Monday and grew slightly on Tuesday.

However, investors did not stop betting against GameStop until Wednesday, as they changed their investments and the company’s stock gained extraordinary profits. this shift was closer to being pressure from “short-sellers” investors to exit without losses from the company’s share, which nearly doubled in value before suffering slight contractions, and by the end of trading on Wednesday, the company’s shares rose by 57.4%, reaching its highest level since August 2016.

The rate of pressure on GameStop shares often plays an important role in the growth of its share, as short-term investments in the company’s shares reached 135% on the fifth of this month, which means that the demand by “short-sellers” investors to borrow shares has exceeded the available supply in market.

While pressure from investors appears to be the reason for the company’s stock rally, it was the change of the board of directors on Monday that sparked the stock’s rally this week.

On Monday, the company announced that despite a 3.1% decline in net sales from the same period last year, its online sales rose 309% and accounted for more than a third of the company’s revenue during the holiday season. GameStop stock closed at $31.40 on Wednesday, up 63% year-to-date.

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