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GameStop’s shares rallied again in premarket trading on Wednesday, continuing the series of wild swings for the stock as several high-profile short sellers said they had pulled out of their positions.
The stock traded at around $ 375 per share at 9:44 a.m.ET, up 154% in premarket trading.
The final step up comes as some of GameStop’s high profile short sellers, including Melvin Capital and Citron, announced they had covered most or all of their positions.
The stock lost some of its premarket gains after the short sellers made their announcements, but the stock rebounded to new highs shortly before the market opened.
GameStop’s near-vertical rise in the past week has come as retailers, many of whom have documented their movements on the social media site Reddit, have piled into the stock and call options. The rising stock price has contributed to a stock squeeze, forcing shorts and options traders to buy shares of a rising stock to cover their positions, resulting in a feedback loop that drives the stock even higher.
The stock appeared to be getting a boost in expanded trading on Tuesday after Tesla CEO Elon Musk tweeted the link to the Reddit board where much of the discussion has taken place.
The video game retailer, which had a market cap of less than $ 4 billion late last week, was the most-traded stock in the market by value yesterday, according to Deutsche Bank strategist Jim Reid.
GameStop’s rapid rise has led to comparisons to speculative trading during the tech bubble of the late 1990s and has led many Wall Street veterans to warn investors of the possibility of significant losses.
Hedge fund manager Michael Burry, who said he owned 1.7 million shares of the stock at the end of September, said in a now-deleted tweet that the rise was “unnatural, insane and dangerous”. Burry also told Bloomberg News that he does not currently hold a long or short position in the stocks.
William Galvin, Massachusetts’s chief securities regulator, told Barron that GameStop trading could be “systemically wrong.”
Bank of America raised its stock price target to just $ 10 a share on Wednesday, saying in a note to customers that the increased stock price could help GameStop’s turnaround plans, but posed a risk to investors.
“While it is difficult to know how much very high short-term interest and retail holdings … could continue to put upward pressure on stocks, we think fundamentals will play a role in valuation again,” the note said.
The Securities and Exchange Commission declined to comment to CNBC.
– CNBC’s Michael Bloom contributed to this story.