GameStop climbs 11% as Reddit merchants dig

Tiffany Hagler-Gear | Bloomberg Getty Images

Shares of GameStop rose 11% in prepaid trading on Wednesday as a squeeze by retail traders on Redspit, which looks to revive itself after the fall.

The stock was down more than 11% on Wednesday morning, but turned black shortly after ET.

Shares of the brick-and-mortar video game retailer rose 1,625% in January and 400% last week, as did traders led by Reddit Thread WallcraftBets.

But earlier this week the pace was reduced. GameStop’s stock fell 60% on Tuesday and has lost more than 70% of its price since Friday.

AMC Entertainment, another heavy stock that was also targeted by Reddit traders, increased premarket trade by about 4%.

Robinhood and other retail trade apps continue to limit some purchases of collections of stock, followed by Reddit Thread. Several Wall Street hedge funds began short-covering by the end of last week after incurring significant losses in the squeeze.

Short selling is a strategy in which investors borrow shares of a stock at a fixed price in the hope that the market price will fall below the level when it is time to pay for the borrowed shares. Purchasing borrowed shares to close a short position, whether for profit or loss, is known as short-covering.