Last Friday, this happened to Gamestop (GME)’s share price:
As it stands, the stock is experiencing a short squeeze, ~ 70M of shares short out of ~ 65M shares outstanding.
The current short squeeze has resulted in more shares of Gamestop being shorted than actually existing. Thus the higher the stock goes, the more pressure those short sellers will be feeling as they will have to buy shares to close their positions.
Once those short sellers crack and buy shares, the share price will rise, putting much pressure on the other short sellers.
This has rocketed the GME share price to levels not seen before and it is not showing signs of letting up.
For context, our pals over at WallStreetBets at Reddit or commonly known as r/WSB has been bullish about GME since nearly 6 months ago.
There are 2 main reasons why they are bullish.
Reason no. 1 – Unrealistic shorting of the stock