NYSE Enforces Short Sale Limit on GameStop Amidst 234% Increase in Short Interest

The New York Stock Trading platform (NYSE) has enacted a Short Sale Restriction (SSR) on GameStop (GME) following a substantial increase in short-selling activity, echoing the 2021 short squeeze that impacted Wall Street significantly.

According to data from TradingView, GameStop’s short sale volume leaped by 234% within a single day, hitting 30.85 million shares sold short on March 27. The NYSE SSR compliance is automatically activated when a stock drops more than 10% from the previous day’s closing price.

GameStop’s shares fell 22% during the trading session, wiping out the 12% increase it had gained after a recent Bitcoin-related update. At the time this was reported, GME shares were priced at $22.09.

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Short Sale Restriction Limits GameStop Shorts Through the Following Trading Day

Under SSR regulations, restrictions will apply for the duration of the trading day and the whole next day, limiting short sales to prices above the current national best bid.

Kevin Malone, CEO of Malone Wealth, emphasized the significance of the trading volume, stating in a post on X that “GameStop traded 50 times more shares today than last Thursday. It’s statistically impossible without naked short-selling.”

GameStop Corp $GME traded 50x more shares today than last Thursday. Not statistically possible without naked short selling. pic.twitter.com/vBIL8IeFc6

— Kevin Malone (@Malone_Wealth) March 27, 2025

The short-selling volume approached figures last observed in January 2021, when GameStop’s share price surged during a viral short squeeze driven by retail investors. At its highest point on January 19, 2021, GameStop recorded 33.26 million shares sold short.

This latest surge is the second-highest since then, only falling short of the June 3, 2024, peak of 46.2 million shares, which took place soon after retail investor Keith Gill—recognized for initiating the original 2021 rally—returned with a $180 million position in GameStop.

GameStop recently announced a $1.3 billion convertible notes offering, which could be utilized in part for Bitcoin purchases, although the company has not specified how much it intends to spend.

Certain market analysts have voiced concerns. In an interview with Yahoo Finance, Tastylive CEO Tom Sosnoff remarked that the move seemed “a bit dot-comish,” indicating that the company may lack a robust growth strategy.

Some analysts suggest the convertible debt offering might be contributing to the drop in stock price.

Analyst Han Akamatsu noted similarities with MicroStrategy’s 2021 decline following a comparable convertible note issuance, indicating that GameStop could be preparing for a potential short squeeze should Bitcoin or GME shares see a significant increase.

$GME SSR Rule is on for tomorrow.

They can still short, but only if the stock moves up before they can short into it.

Repeatedly crashing the bid is restricted. pic.twitter.com/oVHumcv5XS

— Han Akamatsu 赤松 (@Han_Akamatsu) March 27, 2025

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GameStop Aligns with Corporate BTC Movement through New Investment Policy Announcement

On March 25, GameStop disclosed that its board members had unanimously endorsed a revised investment strategy, enabling the company to diversify its reserves by acquiring Bitcoin.

Under the leadership of CEO Ryan Cohen, GameStop has been investigating new strategies to tackle declining physical retail sales, which saw net sales decrease from $5.27 billion in 2023 to $3.82 billion in 2024, alongside rising competition from digital gaming platforms.

As of February 1, GameStop held more than $4.7 billion in cash reserves, primarily due to cost-cutting initiatives and equity offerings.

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