GameStop trading halted
Hold on to your hats, folks! The New York Stock Exchange (NYSE) has slapped a Short Sale Restriction (SSR) on GameStop. Why? Because trading volume just went through the roof, hitting levels that remind everyone of GameStop’s wild 2021 short squeeze.
Let’s dive into the numbers: GameStop (GME) short sales volume – that’s the total shares people are betting against within a set period – shot up a crazy 234% in just 24 hours! We’re talking about a whopping 30.85 million shares sold short on March 27th, according to the folks at TradingView.
So, what triggers this SSR? Well, it’s like a circuit breaker – it kicks in when a stock price plunges more than 10% from the previous day’s close. And guess what? GameStop took a nosedive of 22% during the trading day. Ouch! That wiped out its recent 12% jump from the Bitcoin announcement and then some, as reported by Google Finance.
As of right now, GME is trading at $22.09.
GameStop shorts volume near 2021 short squeeze levels
This trading rule isn’t just for a moment; it stays in place for the rest of the current trading day and all of the next trading day. Kevin Malone, president and CEO of Malone Wealth, chimed in on X on March 27th, saying, “GameStop traded 50 times more shares today than last Thursday. That’s statistically improbable without some naked short-selling in the mix.”
GameStop’s short sale volume hit 30.88 million on March 27th. Source: TradingView
This massive short volume is creeping close to the levels we saw back in January 2021. Remember that? GameStop’s stock went absolutely ballistic after a “short squeeze,” creating headaches for hedge funds and short sellers, while some everyday traders saw some impressive gains.
The peak back then? A staggering 33.26 million shares on January 19th.
GameStop Bitcoin buy is “dot-comish”
GameStop hasn’t spilled the beans on exactly how much Bitcoin they’re planning to buy. But, right after the markets closed on March 26th, they announced they were offering $1.3 billion in convertible notes.
However, some experts and commentators are scratching their heads about GameStop’s Bitcoin move. Tom Sosnoff, founder and CEO of Tastylive, chatting with Yahoo Finance on March 27th, said this whole Bitcoin thing feels “a little dot-comish” to him.
Source: Hans Akamatsu
Sosnoff elaborated: “It feels a bit like, ‘Oh, let’s just slap a dot-com on our name and buy some Bitcoin with our extra cash because we can’t seem to find a growing business to invest in.'”
Meanwhile, Bret Kenwell, a US investment analyst over at eToro, told Reuters on March 27th that “investors aren’t exactly jumping for joy about the core business right now.”
Biggest day of short sales still goes to Keith Gill’s return
But here’s a fun fact: even with this surge, the record for short sales still goes to June 3rd, 2024, hitting a massive 46.20 million.
That date lines up with when Keith Gill, you know, the guy famous for the 2021 GameStop short squeeze, announced on June 2nd that he was back in the GameStop ring, this time with a cool $180 million to play with.
Related: Firms without business models ‘buy Bitcoin’ — Angel investor Jason Calacanis
GameStop has said that these convertible senior notes – which are basically debt that can turn into stock later – will be used for general company stuff, including buying Bitcoin.
Some analysts are pointing to this convertible notes announcement as the very thing that triggered the stock’s slide.
Han Akamatsu noted in an X post on March 27th that GameStop’s stock is falling for the same reason Strategy (formerly MicroStrategy) took a hit after issuing convertible notes.
“Back in 2021, MSTR issued $1.05 billion of 0% convertible notes. The stock dipped initially because of hedging shorts, but then exploded when Bitcoin took off and the arbitrage unwound,” Akamatsu explained. He then added:
“GME is following the same playbook now…If GME or BTC takes off, things could get very interesting as we might just see another squeeze opportunity here.”
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This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
