Shares of GameStop Corp. popped 51% on Friday after short seller Citron Research said that it will stop commenting on the video game retailer’s stock following the actions of an “angry mob.”
The stock closed at $65.01 on Jan. 22. The move came after Citron Research had to postpone a planned livestream YouTube video, which would detail the five reasons GameStop (GME) stock will plunge back to $20 per share fast. The video did come out later than announced but not as a livestream event, following “multiple hacking attempts” on its Twitter account, according to Citron Research.
“What Citron has experienced in the past 48 hours is nothing short of shameful and a sad commentary on the state of the investment community,” Citron’s Andrew Left wrote in a letter posted on Twitter. “We will no longer be commenting on GameStop, not because we don’t believe in our investment thesis, but rather the angry mob who owns this stock has spent the past 48 hours committing multiple crimes that I will be turning over to the FBI, SEC and other governmental agencies.”
“This is not just name-calling and hacking but includes serious crimes such as harassment of minor children. We are investors who put safety and family first, and when we believe this has been compromised, it is our duty to walk away from a stock,” Left added.
GameStop shares have spiked a whopping 1,513% over the past six months, while analysts have a Hold consensus on the stock. Out of the 6 analysts covering GME, 3 rate it as Hold, and 2 say Sell, and 1 analyst says Buy. (See GME stock analysis on TipRanks).
Following the recent rally, the average price target of $10.72 suggests shares are poised to pull back 84% over the coming year.
Meanwhile, Wedbush analyst Michael Pachter believes that “GameStop is well-positioned to be a primary beneficiary of the new console launches, and we remain quite optimistic that it will return to profitability by FY:21.”
However, for now Pachter reiterated a Hold rating on the stock with a $16 price target as he argues that the “global pandemic remains a hurdle, and we expect it to remain a hurdle until the majority of GameStop’s addressable market is vaccinated.”
“We have a positive bias, and we think the company is positioned to generate solid profits in 2021 and beyond, but until we have greater visibility, we are unprepared to upgrade,” the analyst summed up.
On TipRanks’ Smart Score system, GME gets an 8 out of 10, indicating that the stock has strong potential to outperform market expectations.
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