GameStop Inflicting More Pain on Shorts With New 30% Premarket Gain
GameStop (NYSE: GME) continued its beat down on short-sellers on Tuesday, racing some 30% higher in premarket trading, though it had settled to being up by only 15% just prior to the market's open.
The new trading maintained the volatility surrounding the video game retailer in 2021, as its heavily shorted shares see investors racing to cover their positions as they get caught in a short squeeze.
A squeeze occurs as sellers begin to buy back their stock at higher prices, which pushes the shares up even more, causing more short-sellers to cover. At one point yesterday, GameStop's stock more than doubled in value and trading had to be halted nine separate times during the day.
Source Fool.com
