Stocks Rise Another 60% Following Musk's Support to Overcome Short Selling (Comprehensive)

Unusual Surge in US GameStop Stock Price Highlights Social Phenomenon
Shares Rise 92% in Regular Trading, Then Jump Another 60% in After-Hours Trading

[Asia Economy New York=Correspondent Baek Jong-min] GameStop's stock price, which has been soaring continuously in the US stock market, broke through the $200 ceiling following remarks by Elon Musk, CEO of Tesla.

On the 26th (local time) in the New York stock market, GameStop's stock price closed at $147.98, up 92% from the previous day. Afterwards, in after-hours trading, it surged 60% to reach $239.

While the regular trading session's rise in GameStop's stock price was record-breaking, the sharp increase in after-hours trading was also extremely unusual.

CNBC reported that the after-hours surge in GameStop's stock price was due to CEO Musk linking the community of individual investors who have driven up GameStop's stock price on his Twitter, writing "gamestonks." "Stonks" is internet slang for "stocks."

Tesla also experienced concentrated short-selling attacks similar to GameStop. It was estimated that short sellers suffered losses of about $35 billion (38 trillion KRW) as of December last year due to Tesla's stock price surge. GameStop's short sellers reportedly suffered losses of about $6 billion as of the previous day.

In the previous day's trading, GameStop's stock price soared to $159 intraday before the gain narrowed to about 20%, but on this day, the closing price and the high price were formed at similar levels. Trading volume exceeded 150 million shares for three consecutive days.

The rise on this day is also interpreted as being driven by concentrated buying by retail investors based on the online community "Reddit." Investors are buying GameStop shares with a resolve of "ride or die."

Despite large-scale short selling, the phenomenon where concentrated buying by individual investors drives up the stock price and short sellers buy back the shares they shorted, known as a "short squeeze," is considered unprecedented in the US stock market.

US retail investors are now seeking new investment targets following GameStop.

On this day as well, low-priced stocks such as Nokia, BlackBerry, and AMC experienced large-scale trading and price fluctuations from the previous day, which Wall Street interprets as retail investors searching for the next GameStop. These stocks traded 200 to 300 million shares in a single day, emerging as the hottest stocks in the New York stock market.

Investors are targeting stocks with high short-selling ratios, like GameStop. Investment-related media have also started introducing stocks with high short-selling ratios.

According to Barron's, GameStop's short selling has risen to 144% of the float. Despite the buying enthusiasm of retail investors, short sellers are also increasing their selling volume, intensifying the confrontation between the two sides.