GameStop share price: What’s behind the 8,000% run?

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GameStop share price reaches new highs

The GameStop-WallStreetBets-Citron saga continued overnight, with the stock surging 92.61% or $71.15, to finish out Tuesday's session at $147.98 per share.

The hyper-bullish price action didn’t stop there. Traders continued to pile into GameStop (GME) at a rapid click in after-hours trade, sending the stock up another 41%, to $209 per share, at the time of writing.

From the company’s 52-week low of $2.57 per share to that after-hours price, the stock has gained in excess of 8,000% in under a year.

WallStreetBet’s recipe for success

This all comes as traders from the popular but controversial subreddit, WallStreetBets (WSB), have piled into GME over the last month – buying both the underlying stock while simultaneously snapping up call options at a rapid click.

This has seen many from the subreddit post screenshots of dizzying gains, often accompanied with brash language and a nihilistic tone. For example, one recent post boasted that a WSB user had turned a mere $50 thousand bet into over $22 million trading GME.

But it’s not just users from WSB piling into the stock or poking fun at GME’s meteoric run. Controversial billionaire investor, Chamath Palihapitiya on Tuesday revealed he too was taking a punt on GME, tweeting out an image showing that he had bought 50 call options on GME. He did this at the behest of his Twitter followers, saying:

‘Tell me what to buy tomorrow and if you convince me I’ll throw a few 100 k’s at it to start.’

Even Elon Musk – another billionaire who has courted controversy for his tweets in the past – threw his opinion into the ring, tweeting ‘Gamestonk!!’ and providing a link to the WSB subreddit.

Shorts remain short

Despite the feverish atmosphere that continues to build around GME, some, such as the well-known short-seller Andrew Left, remain bearish on the stock.

Left’s Citron Research last week tweeted that ‘GameStop buyers at these levels are the suckers at this poker game’ while adding that ‘$GME going to $20 buy at your own risk.’

After being derided and threatened for this view, Left said he would no longer comment on GME.

He seems to have revised this commitment to a media blackout somewhat, telling Reuters on Tuesday that he was still short GME (despite the colossal run up in price); while adding that:

‘Had never been involved in GameStop and came to this right now, would I still be short this stock? 100 percent.’

‘This is an old school, failing mall-based video retailer and investors can’t change the perception of that,’ Mr Left added.