(Reuters) – Esports Entertainment Group Inc said on Thursday it had not held any sale talks with GameStop Corp, after short seller Citron Research said the videogame retailer should buy the online gambling company.
Earlier in the day, Citron said in a tweet that such a move would be “obvious and easy to justify (GameStop) stock price”.(bit.ly/2MocuDQ)
The tweet sent Esports stock up about 27%, hitting its highest in over three years, while GameStop continued its rally at about 40% higher.
“We have talked to GameStop in the past about areas within Esports where we might be able to collaborate, but we haven’t had any discussions around acquisitions,” Jeff Cohen, vice president of strategy at Esports Entertainment, told Reuters.
There have been some conversations with Citron, with regard to Esports’ business model, what is being built within Esports and online gambling, Cohen added.
The latest developments come hours after GameStop shares shot higher in early trading, before a series of New York Stock Exchange trading halts, a day after an unexpected surge doubled the price of the videogame retailer’s stock.
The stock hit $160 at the open before being halted after several minutes of trading.
Citron ceased publishing short-seller research earlier this year, following a brutal short squeeze on GameStop, which it had a bear thesis on.
Esports “could easily go to $50” per share considering the synergies involved, Andrew Left-led Citron said.
“There is one way for GameStop to seamlessly both pivot away from its secularly declining retail business and monetize its customer database, and that answer is to acquire Esports Entertainment Group,” Citron said in a report.
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