So You Missed The Epic Move In Gamestop: Here's How To Catch The Next One

Back in 2013, we first said that in a market as broken as this one, where no fundamental or technical analysis works, and where logic and rational thought have been flipped upside down thanks to the Fed, the best strategy is to merely go long the most shorted stocks... and wait for the epic short squeeze.

Well, a few days ago, something caught our eye: just as Gamestop's stock was starting to ramp higher, we pointed out that the open interest of Gamestop was higher than the float...

... potentially setting up an epic short squeeze, like that in Volkswagen which exploded ten-fold back in 2008 which found itself in a similar predicament with not enough physical share float to cover all outstanding shorts (whether or not these calculations are in fact 100% accurate doesn't matter: all that is needed is for the perception that there may be an epic short squeeze to spread, coupled with some upside catalyst).

Well, that catalyst today was Citron Research which, with the stock already rampaging in the past few days, announced at the open that it will stop commenting on the stock following the actions of “an angry mob.”

"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," Citron managing partner Andrew Left wrote in a Friday letter.

Left's letter came a day after he said in a YouTube video that he’d “never seen such an exchange of ideas of people so angry about someone joining the other side of a trade,” referring to Reddit bulls who have been particularly "vocal" on the social media site in pushing their bullish opinions on the video-game retailer’s stock.

An army of Robinhood, Reddit and TicToc traders read the letter as capitulation on the fund's short position, recall that as recently as Tuesday Citron said that it saw the stock returning to $20 "quickly"...

... which in turn unleashed a historic pile up into Gamestop today as daytraders tired - and succeeded - in forcing a massive short squeeze. So furious was the ramp, that at one point, the video-game retailer was the most actively traded US company with a market value above $200 million, according to Bloomberg. It certainly was the most active day in company history: with more than 193 million shares traded on Friday, it was the most active day for the company since it went public in 2002.

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