The GameStop craze isn’t over yet. After a rollercoaster month of bubbles and bursting, the video game retailer chain’s stock price suddenly jumped 100 percent Wednesday afternoon, surging from a three-week low.
The surge was apparently driven by news that GameStop’s CFO Jim Bell, a key member of the company’s notorious leadership team, will step down in March. In fact, GameStop announced its CFO departure on Tuesday, but stock investors didn’t spring into action until a day later, after media reports alleged that Bell was ousted by the company’s board.
GameStop shares shot even higher Thursday morning, triggering a series trading halts by the New York Stock Exchange. The stock, trading at $50 per share Wednesday afternoon just before surge, opened at $160 Thursday morning before NYSE suspended trading for several minutes—twice.
Shares hit a daily high of $177 Thursday afternoon and closed at $108 at the day’s close, up over 200 percent from the start of the week.
GameStop’s jump also lifted other penny stocks popular on Reddit’s WallStreetBets. Theatre chain AMC (AMC) Entertainment shares rose 12.5 percent while headphone company Koss up 60 percent, on Thursday.
Wall Street analysts were baffled by these “Meme” stocks’ surprise rally when major stock indexed took a nose dive on Thursday on rising bond yields and fear of inflation. The rebound doesn’t seem to be a replay of the feud between hedge funds and amateur retail investors in January. Still, it’s estimated that GameStop short sellers have lost nearly a $1 billion on Wednesday and Thursday, according to data from the financial analytics firm Ortex cited by Reuters.
Some analysts believe that the surge was in part driven by former GameStop bear Citron Research’s recommendation on Thursday that the company should acquire online gambling company Esports Entertainment Group to justify its high stock price.
It is opinion of Citron that $GME next move is obvious and easy to justify stock price. They should buy $GMBL. Listen to your customers..they like to gamble and they like video games. Esports Gambling – Great synergies….$GMBL could easily go to $50. https://t.co/FQYzY9t2R3
— Citron Research (@CitronResearch) February 25, 2021
Last week, the House Financial Services Committee grilled the CEOs of Robinhood and Reddit, as well as Keith Gill, the star trader on Reddit’s WallStreetBets forum, for half a day over their roles in fueling up market volatility.
After the hearing, Gill revealed in his YouTube channel that he’d doubled down on GameStop and bought additional shares last week.
During the busiest trading hour of GameStop stock in late January, Robinhood imposed buying restrictions for several days in order to raise cash to meet its clearinghouse deposit requirements. The trading platform didn’t halt buying or selling on Thurday. Fewer retail investors rushed into the game this time. Per Reuters, about 60 million GameStop shares changed hands Thursday morning, well below the nearly 200 million shares that traded hands daily in late January.