Wall Street91裸聊视频檚 mania over GameStop is on again, at least for one afternoon.
Shares in the troubled video game company more than doubled Wednesday to $91.71 apiece, the stock91裸聊视频檚 best day since Jan. 27, when it was going for $347.51 a share.
A rally in GameStop has been rare since it fell back to earth early this month. The stock, which soared 1,600% at one point in January, has been extremely volatile.. It91裸聊视频檚 down nearly 72% so far in February, though it91裸聊视频檚 still up nearly 387% this year.
Shares in AMC Entertainment, another stock hyped by online social media forums, jumped 18.1%. The movie theatre chain91裸聊视频檚 stock is up nearly 60% this month and about 329% this year.
The sudden, sharp move higher in GameStop and AMC Entertainment left even some members of Reddit91裸聊视频檚 WallStreetBets forum, which helped cheer the stocks91裸聊视频� meteoric rise last month, scratching their heads.
91裸聊视频淐an we honestly sound off on what we think is happening?91裸聊视频� wrote one Redditor. 91裸聊视频淚s there any reason for this 150% spike??91裸聊视频� asked another.
GameStop91裸聊视频檚 wild ride shocked Wall Street, forcing the market to gird for more volatility. It prompted Congress to hold a House hearing last week into what led to the frenzy and whether smaller investors need to be shielded from taking big risks.
Individual investors on Reddit and other social media forums encouraged each other to buy GameStop, AMC Entertainment and select other stocks in a bid to hurt hedge funds that were betting the stocks would lose value. The move, known as a 91裸聊视频渟hort squeeze,91裸聊视频� can lead traders who were using options to bet against a stock to abandon their bets. To do so, they have to buy shares of the stock, which pushes the price even higher.
GameStop was an extreme example because some of its shares had been sold short multiple times.
Gust Kepler, CEO of stocks and options platform BlackBoxStocks, said that he became aware around 3:30 EST Wednesday of 91裸聊视频渁ggressive buying91裸聊视频� of call options on GameStop shares. A call option gives a trader the right to buy a stock at a certain price at a later date.
91裸聊视频淚 am not certain that there91裸聊视频檚 another short squeeze going on like the one before, however, there are probably some funds who stayed short assuming the dust would settle,91裸聊视频� Kepler said.
Another possible reason for GameStop91裸聊视频檚 sharp move: The Grapevine, Texas, company announced Wednesday that its chief financial officer will be resigning on March 26.
91裸聊视频淭he CFO exited the company and there91裸聊视频檚 talk of the company finally transforming from a brick and mortar to deploying their product in a digital way, and this is why we believe the stock shot up at the end of the day today,91裸聊视频� Kepler said.
Some of the traders who bid up GameStop91裸聊视频檚 shares last month cited optimism that new board member Ryan Cohen, the founder of online pet store Chewy, would help turn the struggling retailer91裸聊视频檚 fortunes around.
The company has been struggling to adapt to the rise of mobile gaming and digital downloads that have rendered its more than 5,000 stores obsolete, even more so during the pandemic.
Some market watchers speculated that GameStop91裸聊视频檚 surprise reanimation was a reaction to critical comments from Charlie Munger, Warren Buffett91裸聊视频檚 right-hand man.
Speaking at the annual meeting of Los Angeles Daily Journal Wednesday, the Berkshire Hathaway vice chairman pinned the GameStop stock frenzy on small investors that he said were gambling on the stock market.
91裸聊视频淭hat91裸聊视频檚 the kind of thing that can happen when you get a whole lot of people who are using liquid stock markets to gamble the way they would in betting on race horses,91裸聊视频� Munger said.
The remarks didn91裸聊视频檛 win Munger many admirers on WallStreetBets. One Redditor posted a chart in the forum showing the spike in GameStop91裸聊视频檚 shares, adding: 91裸聊视频淭AKE THAT CHARLIE MUNGER.91裸聊视频�
