Ramin Frying | Bloomberg Getty Images
GameStop surged yet again, topping $ 450 Appy in the premarket on Thursday as the reddit-driven retail momentum continued to heat up.
Shares of the brick-and-mortar video game retailer reversed losses in overnight trading, with a jump of $ 451.10 from the previous 31% it turned into prepaid trading. The move followed a massive 130% rally on Wednesday, taking its week-on-day gain to 466%. The stock was valued at about $ 40 a week ago.
GameStop has been a red-hot target in the “Wallstreetbets” Reddit chat room, where an army of in-house retail investors came together to push stocks higher and squeeze short-selling hedge funds. The forum, which now has more than four million members, briefly went private on Wednesday night as moderators said they were “unable to ensure Reddit’s content policy.”
A trending post said on Thursday “Don’t be afraid of a fall in $ GME $ BB. Hedge funds to scare y’all after trading hours … KEEP buying and holding.” The post quickly attracted over 1,000 comments in an hour.
Another top post in the community featuring a photo from GameStop said “Buy High, Never Sell”.
Some passionate Reddit users are sharing screenshots of their brokerage accounts, showing monstrous returns from trading in Gametop and other names.
New Constructions CEO David Trainer said, “Gametop’s stock has a game of action music chairs and my advice to investors is to discontinue music.” “As agile as the trading crowd is to choose GameStop as one of their favorite stocks, they can be just as agile as to drop stocks.”
The Reddit crowd began targeting other heavy names including Bed Bath and Beyond and AMC Entertainment.
AMC alone touched 300% on Wednesday, making its weekly rally more than 450%. In the previous session, more than one billion shares in AMC marked their highest volume day. Bed Bath and Beyond have also increased 75% this week. The pair dipped slightly in prepaid trading on Thursday.
Extreme speculative behavior among fraudulent investors is troubling many on Wall Street as rising losses by hedge funds could spread to other areas of the market. Some also believe that this buying frenzy can hurt the confidence of the entire market and destabilize the conditions.
The S&P 500 and the Dow Jones Industrial Average suffered their biggest losses on Wednesday since October as concerns about the frenzy deepened.
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