GameStop shares 60% as Reddit army returns to Wall Street
The army of investors HE Reddit was back on the march today, sending shares in US “memes stocks” such as GameStop to record highs this month.
GameStop, the brick-and-mortar video game seller at the center of a frenzy of armchair traders in January, rose 70% to $ 160 when Wall Street opens this afternoon.
This came after a late rally in the last 90 minutes of the previous session pushed its share price from $ 49 to $ 91.71 amid growing online speculation that a major investor in shares might have taken a stake.
Today, a stop-start afternoon of volatility suspensions left the stock hovering around $ 143, still up nearly 60%.
Just over 100 million shares had changed hands by mid-morning, nearly double its 30-day average volume of 62 million.
Other businesses caught in the initial meme buying mania epidemic – coordinated on the WallStreetBets forum on Reddit – also jumped in Wave 2.
McDonald’s ice cream may seem like an unlikely trigger for a new frenzied retail episode
Koss, a Milwaukee-based headphone maker, rose 55% to $ 9.85.
The AMC movie chain rose more than 10% to $ 10.04. Nokia climbed 7.7% in Europe and BlackBerry 5.3% at the start of the session.
The new surge in volatility, fueled by retail traders using free investing apps like RobinHood, has sparked new warnings for small investors.
Back to the MOON !!!
Stockwatchers were looking to identify a reason behind the second wave.
Some have cited a report on Bloomberg News as saying that GameStop CFO Jim Bell was kicked out of a disagreement over strategy to make way for a framework more in line with the vision of the activist investor and board member. administration Ryan Cohen.
Cohen, is the co-founder of online pet food retailer Chewy.com, and his addition to the board at the start of the year – and calls the company to move from malls to the lucrative market. from the download – supported the first wave of moves in the stock.
According to Neil Wilson, chief market analyst for Markets.com, the sudden surge in GameStop may have been triggered by a cryptic tweet from Cohen, who posted a frog emoji and a photo of an ice cream cone. McDonald’s.
“Does that mean Cohen is going to fix the business like McDonald’s finally fixed their ice cream machines?” Wilson wrote in a note. “Who knows, stranger things have happened. Looks like the Reddit crowd is starting over. ”
Further speculation ensued that equity investor Volition Capital, a major backer of Cohen’s chewy.com, could have stepped in.
An article on the chewy.com website reads: “FUN FACTS ABOUT CHEWY & VOLITION: Chewy’s first official board meeting included two slides, lots of laughs, and a trip to McDonalds for sweet service.
A Reddit sleuth wrote: “You guys! Ryan Cohen has the reins as CEO and they just held their first board of directors 🍦. Like he did to Chewy! The frog is the long-used symbol of transition and change, from the tadpole to the frog.
Analysts have ruled out a short squeeze like the one in January that hit hedge funds, as some said the rally may have been partially fueled by fear of betting against GameStop.
Dennis Dick, a trader at Bright Trading, told the Benzinga podcast: “There aren’t a lot of people just sitting there, ‘Oh yeah, let’s have some fun, let’s shorten GameStop and rip my head off.’
Whatever the explanation, the aftermath of last month’s retail boom raised fears that amateur investors would pile up in the stock at an inflated price, only to lose hundreds of thousands when the bubble collapsed. bursts.
Confirmation of this fear goes through a series of new posts on the r / WallStreetBets forum.
“Why is GME increasing? Asked one user. “Because we love the stock,” replied another – the phrase used by GameStop backer Keith Gill, aka RoaringKitty, when he was taken to Congress earlier this month.
Another posted: “I missed GME the first time around, I won’t make this mistake again. TOWARDS THE MOON “
Charlie Munger, longtime business partner of Warren Buffett, said: “It’s really stupid to have a culture that encourages so much action gambling by people who have the spirit of track bettors.”