On Friday, January 22nd, the stock price of an off-radar US video game retailer, GameStop, shot up 50%, causing a trading halt in its shares. The stock went up 18% the following Monday and 93% on Tuesday. Suddenly, everyone was talking about GameStop and how a Reddit community, named Wallstreetbets, declared “war” on Wall Street and the “mean” Hedge Funds.
Days before the events unfolded, Citron Research said GameStop’s business was in “terminal decline” and mentioned it had a short position on the stock. Melvin Capital was also known to be heavily short on GameStop. …
Let’s see how the current environment looks like.
Here are some uncertainties that govern investors’ reactions over the past 50 days: