GameStop erases gains after spiking 145 percent on bizarre short squeeze

GameStop shares spiked as much as 145 percent on Monday in a wild day of trading that later saw them briefly plunge into negative territory — the latest bizarre session for the stock as day traders duke it out with hedge funds.

The frenzied Monday spike — driven by a cadre of individual investors on chat forums like Reddit who have encouraged fellow mom-and-pop investors to buy it — sent the shares as high as $159.18 in late-morning trades.

Less than an hour later, however, the shares had briefly dipped as much as 6 percent below their open. By day’s end, the shares closed up 18 percent at $76.79 — a day after closing 51 percent higher in a similarly bizarre trading session.

Aggressive short sellers in the stock — some of them hedge funds with relatively big positions — have been forced to cover their bets, buying up the shares and sending them higher. That’s because retail investors🌟 in online forums like Reddit board “/wallstreetbets” have encouraged each other to continue buying the stock on no-free trading sites like Robinhood.

Short interest in GameStop shares on Friday stood at 102 percent of the shares outstanding, making it especially vulnerable to short squeezes as o🌠ne of the most shorted companies on the New York Stock Exchange and the Nasdaq, according to S&P Global Market Intelligence.

Similar action also was seen in shares of AMC Entertainment and Blackberry, which spiked 25 percent and 28 percent, respectively, caus꧂ing some professional traders to lash out at a day on the markets when cheap stocks unloved by Wall Street analysts were trading at ꦿmassive gains.

“T🍰his is the Robinhood rally on drugs,” moaned one hedge fund manager referring to the summer rally fueled by mom and pop investors. “The retail traders are buying things no one else wants, and the big firms clearing their trades are🧜 following up, creating a nightmare situation.”

“Pray for💧 anyone trying to short this market,” said another trader. “🎉The market is broken.”

The epic tug-of-war over GameStop shares took an ugly turn last week when a prominent short seller in the stock, Andrew Left of Citron Capital, said he had been harassed b🦋y GameStop investors and reported their pe🔜rsonal attacks to the FBI and other authorities.

“These are not just name-calling and hacking but have extended to the harassment of bullyi🌠ng of minor children,” Left wrote in a letter he posted on Citron’s website, referring to his family. 

On Thursday, Citron suspended a livestream event to explain𓆉 its short position on GameStop, saying there were attempts made to hack its Twitter account.

GameStop has soared by more than 400 percent in Januꦯary alone, capping a rally that has lifted the shares fr♍om from $6 just four months ago.

The stock began its climb in August when Chewy.com founder Ryಞan Cohen took a 9 percent stake in the Teꦉxas-based chain for an average price of about $8.40 a share. Cohenꦛ, who heads up investment firm RC Ventures, also joined the board this month, sending the shares up again. His stake is about 13 percent now.

“The Chewy believers believe he’ll be successful,” Wedbush anaℱlyst, Michael Pachter 🅺told The Post last week.

But Wall Street is warily watching the battle, with some downgrading GameStop. Pachter’s price target for the retailer is $16 a share.

“The sudden, sharp surge in GameStop’s share price and valuation likely has been fueled by a short squeeze, given the high short interest, and, to a lesser degree, speculation by retail investors on forecasts for the new gaming cycle 𝔍and the involvement of activist RC Ventures,” Telsey analyst Joseph Feldman said in the note on Monday.