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Volatility has hit GameStop stocks again.
The stock closed around 18.5% higher on Thursday after a loud session in which trading was repeatedly halted due to the sharp moves. GameStop jumped more than 100% on Wednesday after the company announced the resignation of its chief financial officer.
Jim Cramer, host of CNBC’s “Mad Money,” said there might only be one way to justify GameStop’s share price:
“One of the things… we saw Square do – initially it seemed silly, but it was OK; PayPal, same thing – is you become a crypto dealer. Note, they talked about March. [They’re] going to have real cards just for the crypto. It really won’t matter to Nvidia, but it could be important to a place like GameStop. If GameStop were to turn into a 5,000 store introduction to crypto, have them sell $ 1 billion worth of stocks … and buy crypto with it, then make it a place of international game where you win bitcoin, I think you can justify the share price. I couldn’t find anything else, but it works. And it doesn’t have to be bitcoin. We can make it crypto. But turn it into a crypto information palace and you’ve got world games, no latency, you’re playing it and suddenly [GameStop investor and Chewy co-founder] Ryan Cohen – then you can start to believe it. Well CFOs, they tend not to have bitcoin on their balance sheets. Perhaps [resigning GameStop CFO] Jim Bell, that’s what he didn’t want. Ryan Cohen is a great thinker. I have a feeling this is the way to increase this stock. I can’t find another solution. “
Alma Angotti, a former Securities and Exchange Commission law enforcement lawyer, expects more interest from regulators:
“It’s important to remember that the securities regime is a disclosure regime and people can speculatively bet on stocks and people can lose a lot of money. And maybe in the mind of some people, that ice cream tweet was linked to the CFO’s resignation tweet and they believe the company is going to be patched up and successfully introduced to the digital world. It’s hard to say. But … I think Congress and the SEC are going to study this balance between orderly markets and let people invest what they want to invest for whatever reason they want to invest, even if it doesn’t make sense. for us. “
Jon Najarian, MarketRebellion.com co-founder and CNBC contributor, has tracked cutting edge options activity in three names powered by Reddit:
“It’s volatility on steroids. And at the end of last week, it’s the regular February expiration. Three stocks really stood out for us at once due to the surge in Reddit posts as well. than [a] sharp increase in option purchases, and these are GameStop, AMC and Blackberry. So when we saw that, it integrated at the end of last week … then it faded, and that’s probably because GameStop was bouncing a bit on Monday and Tuesday it dropped to about 55,000 contracts on the call side. It is quite low. [On Wednesday], it displays up to 270,000 calls. So, in other words, five times the volume [Wednesday]. Similar jumps in AMC which exceeded one million call contracts against a low of around 155,000 last Friday, then Blackberry as well. And all three have seen disproportionate movements. In the case of GameStop in particular, … it was just amazing. [On Thursday], they were buying $ 200 calls and they traded up to $ 46 for a $ 200 call up to about $ 12 just before we went on the air. So there is a lot of fluff and a lot of, I’m not trying to put it down, but a lot of amateur trading chasing these so high with just one day of trading to do, because obviously these options expire tomorrow, The Februarys expire tomorrow at the $ 200 strike. Just crazy. But that’s kind of what is happening. You get a big herd move in there – if they catch well, … they can make a lot of money, and if they don’t move fast, they have less and less time to get out.
Michael Darda, chief economist and market strategist at MKM Partners, preached caution:
“I think we’re all a little confused. Talking to family and friends, I get a lot of questions about the stocks that are the focus of these Reddit forums and also cryptocurrencies. So everything as I tell retail investors who are friends and family, just be careful.Specify if you want to speculate, but it should be a very small part of your portfolio and don’t expect these things to be a one-sided bet. So caution is in order. Certainly needed here. “
Warning
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