Shares of GameStop soared 16.3%. This is after hitting their highest level since late March. Other so-called “meme” stocks also rallied as investors shifted back into the retail favourites that had notched big gains earlier in the year.
Dennis Dick, head of markets structure and proprietary trader at Bright Trading LLC said that once it goes over $200 the buzz will start. He added that you can 100% peg it to social media. The video game retailer’s shares finished at $209.43. This marks their first close above $200 since March 19. Shares of AMC Entertainment Holdings has ended up about 20% while Koss Corp has gained 22.9%.
In recent weeks, the GameStop’s shares and other stocks popular on forums such as Reddit’s WallStreetBets have climbed. This is a move that has come amid a broad sell-off in Bitcoin and other cryptocurrencies. As these are very popular among the individual investors. GameStop closed 46.5% above its lowest close so far for May. On the other hand, Bitcoin is down about 35% so far this month and rival cryptocurrency ether is about 42% below its record.
The recent moves in GameStop and AMC may be forcing bearish investors to unwind their bets. This event is known as a short squeeze and it is speculated by the Denizens of WallStreetBets and some Twitter users. According to Astec Analytics, roughly 26% of GameStop’s float or 14.76 million shares were on loan. The company has changed hands in more than 14 million shares. Some 129 million shares of AMC Entertainment, or 28.8% of its float, were on loan. This is also shown by the Astec data.
Even though the stock pared much of those gains the following month, a short squeeze helped send shares of GameStop on a 1600% run in January. Users on Twitter, exhorted one another to hold or buy more shares of AMC. This took place under the hashtag #notapenny, which notched more than 17,000 posts by 4pm ET.