GameStop Corp. GME chairman and Chewy Inc. CHWY co-founder Ryan Cohen said that the government should crack down on hedge fund short sellers to make good use of taxpayer money.
What Happened: Cohen made the comment on Twitter, after having earlier called short sellers “the dumb stormtroopers of the investing galaxy.”
Good use of taxpayer $ is the government cracking down on hedge fund short sellers— Ryan Cohen (@ryancohen) March 16, 2022
Why It Matters: It was reported in February that federal prosecutors have ramped up a probe into the activities of short-sellers, focusing on their potential use of illegal market manipulation such as “spoofing” and “scalping.”
GameStop was among the most heavily shorted stocks last year. The stock — a darling of the Reddit investor forum r/WallStreetBets — spiked in January 2021 as a wave of buying by bullish retail traders created a short squeeze. This resulted in huge losses for hedge fund short-sellers who had bet against these stocks.
GameStop continues to see high interest from retail investors ahead of the announcement of its fourth-quarter results on Thursday.
Its short percent of float has risen 8.53% since its last quarterly earnings report. The company said it has 11.94 million shares sold short, which is 18.95% of all its regular shares that are available for trading.
Price Action: GameStop closed 5.8% higher in Tuesday’s regular trading session at $82.64, but lost almost 1% in the after-hours session to $81.85.
Photo by Bill Jerome on Wikimedia
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