GameStop stock whips skeptics with surge of up to 94%

GameStop Corp.shares soared to their highest level in more than five years Wednesday as short-sellers betting against the stock scrambled for the exit.

TickerSecurityLastChangeChange % GME GAMESTOP CORP40.75+9.30+29.57%The spike appeared to be driven by a short-covering rally sparked by an agreement the company reached with activist investor RC Ventures regarding the addition of three board members.

Short-sellers borrow shares in order to sell them with the hopes of buying them back at a lower price in the future.

RC Ventures in September purchased 6.5 million GameStop shares to raise its stake to 9.98% with the goal of transforming the company into a major e-commerce player that sells a wide variety of merchandise with fast shipping.

GameStop on Monday reported comparable sales for the nine weeks through Jan. 2 rose 4.8% from a year ago, bolstered by a 309% increase in online revenue.

GameStop expects demand for the new Microsoft Xbox and Sony PlayStation gaming systems to drive sales into 2021 once supply-chain constraints ease.

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