GameStop attracts large investors as shorts back off

San Francisco

GAMESTOP, one of the most shorted US stocks, has started to attract institutional buyers and dissuade some traders betting against it as it fights off a consumer shift toward downloading video games and its depressed share price stabilises.

Shares of the retailer dropped from US$46 to US$25 in the two months through mid-January and then recovered to just over US$30, where they've hovered steadily in recent weeks.

Meanwhile, the number of institutional owners, like hedge funds, pension funds and mutua…