If you thought the ongoing situation around GameStop’s (GME) stock was over, then think again. The stock was on fire today, soaring over 100 percent, and being halted twice in the process.
The market closed at 4 p.m. ET on February 24, and in the hour leading up to the closure, GameStop (GME) exploded. The stock shot up over 100%, ending the day at a valuation of $91.71. GME had seen a small rise throughout the day, catapulting after 3 p.m. ET. The sudden spike was enough to cause GameStop (GME) to be halted twice.
How did GameStop shares peak? Should investment be made?
It’s also noteworthy that Reddit is down at the time that this article is being written. If you’re unaware of the relevance, Reddit is home to r/WallStreetBets, the subreddit community that’s been a driving force behind the GameStop (GME) stock’s volatility over the past several weeks. It’s likely that a high surge in traffic caused the website to temporarily crash.
The GameStop (GME) situation first blew up back in January when the stock hit an all-time high following a short squeeze. The fallout included Robinhood restricting users’ ability to trade, as well as legal hearings. We’ll continue to update this story as new information becomes available.
The stock price of Gamestop is again soaring weeks after its shock rally and catastrophic dive shook Wall Street.
It’s believed that users of Reddit’s WallStreetBets could be behind the meteoric rise after AMC Entertainment, Blackberry and Koss also saw steep rises. The four stocks are favoured by retail traders.
Analysts are unclear why the stock price of the video game retailer has shot up yet again.
Some have suggested that a Tweet by activist investor Ryan Cohen, a major shareholder with Gamestop, is behind the move.
On Wednesday afternoon Cohen tweeted a picture of a McDonald’s ice cream cone along with a frog emoji.
Some retail investors interpreted the tweet as a secretive message indicating that the investor would fix Gamestop – previously regarded as a failing business by some, in the same manner that news of McDonalds fixing their famously faulty ice cream machines leaked weeks earlier.
Analysts are baffled by the claim. Michale Bachter of Wedbush Securities said “I don’t know what an ice-cream means,” adding “people are looking for signals.”
Some experts have pointed to the resignation of Gamestop’s chief financial officer which may indicate that Ryan Cohen’s influence at the company is growing.
“GameStop announced the resignation of its CFO last night. Some may have taken this as a good sign that RC Ventures is making a difference at the company in terms of trying to accelerate the shift to digital,” said Joseph Feldman of Telsey Advisory Group.
WallStreetBets terminology explained
Some WallStreetBets users have expressed their surprise at the stock’s return to form.
To outsiders the conversations between users of the subreddit can be baffling, with the use of memes and in jokes prevalent.
Here’s a breakdown of the key phrases used by WallStreetBets users.
Diamond hands: a trader willing to hold onto stocks or securities for a long time due to a belief in the success of their investment.
Paper hands: a trader who sells stocks and securities too early and fail to maximise profit.
Stonks: an intentional misspelling of stocks, stonks is typically used ironically to refer to an investment which incurred a significant loss
Tendies: used by users to highlight a gain on an investment
To the moon: typically accompanied by a rocket emoji, this is used by traders to express their belief that an investment will enjoy a dramatic gain in overall value.