On Wednesday, GameStop Corp. shares were on track to hit their highest closing price in history and their longest winning streak since the video game retailer’s shares became the model for Reddit-inspired investment frenzy. But a sudden drop in the share price and a halt in trading clouded the market. picture around noon.
The stock traded between 5% and 36% above Tuesday’s close in the Wednesday morning session, even beating the January 27 record close of $ 347.51. They were on track for a six-day winning streak, the longest since Sept. 3, 2020, when stocks ended higher eight days in a row, according to Dow Jones Market Data Group.
That was long before GameStop stocks became a household word starting in January, when buy-and-hold investors on Reddit’s WallStreetBets forum rallied against Wall Street firms betting heavily against stocks, turning it into in one of the shortest actions out there. Recently, an analyst drew a strong correlation between the volume of chatter on WallStreetBets and GameStop’s share price.
However, prices plummeted shortly after noon, losing more than $ 100 a share in a matter of minutes and falling below Tuesday’s closing price of $ 246.90. Trading was halted five times between 12:20 PM and 12:50 PM ET as prices tumbled. Other stocks that were embroiled in the Reddit frenzy appeared to show similar patterns on different scales on Wednesday: AMC Entertainment Holdings Inc. AMC,
Koss Corp. KOSS,
Blackberry Ltd. BB,
and Nokia Corp. NOK,
Stocks also saw the gains in the morning session suddenly disappear after noon.
By noon, GameStop’s trading volume had surpassed 32 million shares, compared with a 10-day average daily volume of 59.5 million and a 52-week average daily volume of 14.9 million. The company has been in command of its highest market capitalization since January and is currently holding at a valuation of more than $ 23 billion. Last week, GameStop settled just shy of a $ 10 billion cap, following a 35% weekly gain.
Before that, GameStop posted its second best week with a gain of 150%, compared to its weekly rally of 400% at the end of January. The best four weekly gains for the stock occurred within a six-week period in 2021 when investors targeted stocks in droves.
GameStop’s fourth quarter results, which include holiday sales, are scheduled for March 23 after markets close. In January, the company gave a sneak peek showing that e-commerce sales increased more than 300%, but overall sales declined in the holiday season.
GameStop shares are up more than 1,700% this year alone and more than 8,000% in the last 12 months. By comparison, the S&P 500 SPX Index,
It has increased by 4% in 2021 and has increased by 35% in the last 12 months.