GameStop shares rise, fall and rise again in a day of roller coaster trading

GameStop Shares climbed Wednesday, hitting $ 348 each, to drop to $ 172 each in the early afternoon, causing multiple stops in the stock’s trading due to volatility. Stocks then rallied and ended the day at $ 265, a 7% increase for the day.

The past two days have been a shopping spree for the video game retailer’s stock since Monday when it was $ 136. This surge coincided with a rally in the overall stock market following the passage on Saturday of the COVID relief bill in the Senate, as well as with the announcement that the video game retailer is developing a new e-commerce strategy, Chewy.com founder Ryan Cohen is leading the effort.

Cohen, who made a significant investment in GameStop last year, will lead a committee seeking to turn GameStop into a “technology company,” the company said in a press release Monday.

GameStop shares have skyrocketed from less than $ 20 in early January to over $ 480 in late January thanks to a massive surge in traders on the Reddit r / WallStreetBets forum. The share price has has dropped dramatically since.

Stocks rallied a bit at the end of February following news of the resignation of CFO Jim Bell. Bell did not leave the company voluntarily, according to Business Insider, and was reportedly kicked out by the board.

The Senate Banking Committee held a hearing on Tuesday to discuss the recent GameStop volatility and the “gamification” of trading by. popular investment apps like Robinhood. There are concerns that commission-free brokers contribute to market volatility and give inexperienced people access to risky trading options.

Massachusetts Senator Elizabeth Warren said on Tuesday she had received responses from the Security Exchange Commission and the Financial Industry Regulatory Authority on the role of hedge funds in the GameStop stock price spike in January. One of the reasons the Reddit community started buying the retailer’s stock was due to a large number of short sales, which is a bet investors make when they think a stock is going to go down. Reddit traders bought the GameStop stock and raised its share price, which led to a “short squeeze,” when hedge funds betting against the retailer were forced to buy the stock in order to avoid big losses. The SEC and FINRA say they are evaluating changes to the rules regarding the practice.

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