What a trip.
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GameStop Shares skyrocketed on Wednesday, reaching $ 348 apiece, only to drop to $ 172 apiece in the early afternoon, causing several stock trading interruptions due to volatility. The stock then rose again and ended the day at $ 265, an increase of 7% for the day.
The past two days have been a shopping frenzy for video game retailer shares since Monday, when they were at $ 136. This increase coincided with an increase in the entire stock market after Saturday’s approval. COVID Relief Bill in the Senate, as well as with the announcement that the video game retailer is developing a new e-commerce strategy, with Chewy.com founder Ryan Cohen leading the way.
Cohen, who made a major investment in GameStop last year, will lead a committee that seeks to transform GameStop into a “technology business”, the company said in a press release on Monday.
GameStop shares skyrocketed from less than $ 20 in early January to more than $ 480 in late January, thanks to a major effort to merchants on the Reddit r / WallStreetBets forum. The stock price has has fallen dramatically since then.
Shares rose slightly in late February after news that Jim Bell, the chief financial officer, is stepping down. Bell did not leave the company of his own accord, according to Business Insider, and was allegedly expelled by the board.
The Senate Banking Committee held a hearing on Tuesday to discuss GameStop’s recent volatility and the “gamification” of trading by popular investment apps like Robinhood. There is a concern that zero-commission brokers contribute to market volatility and give inexperienced people access to risky trading options.
Senator Elizabeth Warren, a Massachusetts Democrat, said on Tuesday that she had received responses from the Security Exchange Commission and the Financial Industry Regulatory Authority about the role of hedge funds in raising GameStop’s share price in January. One reason the Reddit community started buying shares in the retailer was due to a large number of short sales, which is a bet that investors make when they think a stock is going to fall. Reddit dealers bought GameStop shares and raised their share price, leading to a “short-term squeeze” when hedge funds that bet against the retailer were forced to buy the shares to avoid huge losses. SEC and FINRA say they are considering changes to the rules regarding the practice.
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