A GameStop store in New York.
Scott Mlyn | CNBC
GameStop and AMC Entertainment plunged into Wednesday night’s negotiations to return part of the meteoric rise amid a retail shopping frenzy.
The shares of the traditional video game retailer fell 18% in the extent of trade, after a gain of 134% during normal hours. The cinema chain plummeted 33% in late-night trading, after stocks soared 300% in extremely heavy trading.
The pair has been popular targets in Reddit’s “Wallstreetbets” chat room, where a wave of domestic traders has focused on heavily shorted stocks, raising stocks and squeezing short selling hedge funds.
The forum, which has more than three million members, became private for a short time, as moderators said they were not “able to enforce Reddit’s content policy”.
GameStop rose more than 400% this week alone, taking its January earnings to an impressive 1,700%. AMC also soared more than 450% this week. On Wednesday, more than a billion shares changed their name at AMC, marking their highest volume ever.
The rise in speculative behavior among retail investors is raising eyebrows on Wall Street and many were concerned that this could be a sign of a bubble with the stock market at record levels.
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