GameStop Resurgence Extends as Meme Stock Mania Kicks Up Anew

imageStock Markets6 hours ago (Feb 25, 2021 10:45)

© Reuters

(Bloomberg) — GameStop (NYSE:GME) continued its resurgence in U.S. premarket trading, rising as much as 83% after more than doubling on Wednesday in a move that spread to a host of other meme stocks at the center of last month’s day trader-driven frenzy.

The stock rose as high as $167.50 and traded at $135.57 at 4:15 a.m. in New York. Among other favorites of traders populating Reddit forums, AMC Entertainment (NYSE:AMC) rose 17% premarket after gaining 59% during the first three days of the week, while Express Inc (NYSE:EXPR) surged 26%.

GameStop jumped 104% in Wednesday’s cash session, spurred by a final-hour surge that brought its biggest advance since Jan. 29, the day Robinhood Markets restricted trading in it and 49 other stocks at the height of the frenzy. An equally weighted Bloomberg basket of those rose more than 5%, the most since late January.

The activity inflated trading volumes in the meme stocks and caused an outage on Reddit’s WallStreetBets forum, the hub of the January volatility.

“It seems like the Reddit crowd is still active and when you see a bit of news like that they’re pressing again,” Keith Gangl, portfolio manager at Gradient Investments, said in a phone interview. “Though I’m not sure how that’ll last,” he added.

The sudden revival in left-for-dead stocks recalled an episode last month that captured the attention of Wall Street, regulators and eventually Congress, as members of Reddit’s WallStreetBets forum egged on retail hordes in an attempt to take on professional short sellers.

Various explanations circulated as to what spurred the rallies. The GameStop frenzy came after Bloomberg News reported late Tuesday that Chief Financial Officer Jim Bell was pushed out in a disagreement over strategy to make way for an executive more in line with the vision of activist investor and board member Ryan Cohen, the co-founder of online pet-food retailer Chewy (NYSE:CHWY). His addition to the board in early January underpinned the first flurry of moves in the stock after capturing the attention of WallStreetBets.

The clearinghouse whose demands for increased margin collateral from Robinhood forced the brokerage to restrict trading last month published a white paper Wednesday that laid the grounds for speeding up the stock settlement process. It proposed cutting settlement to one day from two, prompting some chest puffing among the retail crowd on Reddit.

Read more: How ‘Flows Before Pros’ Has Disrupted Stock Markets: QuickTake

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GameStop Resurgence Extends as Meme Stock Mania Kicks Up Anew

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