by Keith Weiner
Silver Seek
The hot story this week is the incredible run up in the stock price of GameStop. A week ago, this was a $40 stock, with the company losing well over $4 a share. That’s not surprising for a retail store operator in the world of lockdowns. What is surprising is what happened this week.
The share price ran up to almost $500.
To understand why, let’s take a step back and look at the context.
What Caused GameStop to Run Up?
The stock is heavily shorted, including by hedge funds—probably because the prospects for money-losing retailers are bleak. Then a group on Reddit, Wall Street Bets, promoted the idea of buying the stock because the short interest was greater than the total number of shares (they assumed that this means illegal naked shorting—not necessarily.)