GameStop SEC investigation revealed as new CLOV memes stockpiles focus
GameStop has revealed that the US SEC is investigating its highly volatile stock, confirming that the retailer has received an official request for documents related to the wild rise and fall of $ GME this year. Stocks have been a key part of the so-called rise in ‘memes stocks’ in 2021, where small investors – often led by Reddit groups – target otherwise nondescript stocks and try to squeeze short holders into the process. .
This has led to huge swings in $ GME, and the creation – and even destruction – of paper millionaires as the market tries to adjust. Earlier this year, popular trading platforms like Robinhood cracked down on meme stock trading, in some cases preventing clients from buying more GameStop stocks.
Now, although those limits have since been lifted, the United States Securities and Exchange Commission is investigating GameStop’s situation as part of a larger investigation into the activity of the stocks meme. Although the SEC has not yet detailed the investigation, GameStop confirmed this week that it has been approached with a voluntary request for documents and other information. The company says it is complying with the request.
“On May 26, 2021, we received a request from SEC staff for the voluntary production of documents and information regarding an SEC investigation into trading activity in our securities and securities of other companies,” GameStop said in a statement. Form 10-Q filing this week. “We are in the process of reviewing the request and producing the requested documents and intend to cooperate fully with SEC staff regarding this matter. This investigation should not have a negative impact on us. ”
GameStop, for its part, has been blunt that the rises and falls in its stock price have little to do with actual performance or business practices. In a statement this week, added to its prospectus of Class A common stock from December 2020, the retailer stressed that forces beyond its operations are shaping its actions.
“Our common stock has recently experienced extreme volatility in prices and trading volume,” GameStop recognized. “From January 11, 2021 to June 8, 2021, the closing price of our common shares on the NYSE ranged from $ 19.94 to $ 347.51 and the daily trading volume ranged from approximately 1,790,000 to 197,200,000 shares. . During this period, we have not experienced any material change in our financial condition or results of operations that would explain such price volatility or such volume of transactions. ”
Currently, GameStop stock is valued at just over $ 247 at the time of publication, down more than $ 55 since the market opened on Thursday, June 10. Meanwhile, popular AMC stock has fallen significantly from last week’s highs, down $ 9 today, as a new stock of memes emerged from a competitor, insurance seller Clover. ($ CLOV) seeing an increase in interest earlier this week, although a further decline as markets open today.