Investing.com -- GameStop Corp (NYSE:GME) soared on Monday, and the shares were intermittently halted in volatile Monday morning trading, marking a dizzying and perplexing ride higher.
Shares of the video game retailer have doubled in a week. It is the most heavily shorted stock in the U.S, with more than 138% of its shares sold short, according to CNBC. GameStop shares gained more than 140% in morning trading on Monday and then fell, turning negative briefly. They were last up about 11% for the day.
Earlier this month, GameStop said Chewy Inc (NYSE:CHWY) co-founder and former CEO Ryan Cohen would join its board, fueling hope he would push for a change in strategy. That news forced fierce buying in the stock as hedge funds and other traders tried to cover their short bets. The shares are up 2,962% over one year.
On Monday, Telsey Advisory Group downgraded its rating on the shares to underperform from outperform, citing the sharp run-up.
"The sudden, sharp surge in GameStop's share price and valuation likely has been fueled by a short squeeze, given the high short interest, and, to a lesser degree, speculation by retail investors," the firm said. "We believe the current share price and valuation levels are not sustainable." GameStop shares were trading around $96.