The shares of GameStop Corp. experienced another volatile session and trading stopped on Tuesday, continuing a battle between short sellers and traders gathering on an internet bulletin board.
GameStop GME,
The stock was closed for about six minutes on Tuesday at 12:50 p.m. Eastern time, the second trading stop of the day’s session, as the stock price swung to an intraday high of $ 114.24. Shares fell immediately after the stop, but then rallied again less than an hour later, pushing prices up to $ 124.58.
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The stock was halted nine times on Monday, as the stock more than doubled to a record high of $ 159.18 before ending a violently volatile session that was up 18.1% at $ 76.79. By Monday’s close, GameStop’s stock had risen 334% since trading ended on January 8, bringing the company’s market cap to $ 5.4 billion, its highest level since the end of the 2007 recession- 2009.
GameStop has been a darling of Reddit message board WallStreetBets, where hundreds of posters have pushed for stock purchases after investors betting against the chain pushed short-term interest rates to over 100%. On Tuesday morning, leading investor Chamath Palihapitiya publicly joined the party by purchasing call options that were in the money after the day’s second sudden spike.
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Short sellers have turned to GameStop stock as the pandemic contributed to online selling problems. Citron Research’s well-known short-seller Andrew Left released a video late Thursday outlining points about why GameStop should be a $ 20 share, then backed out, claiming he and his family had been threatened. Shares started to rally in mid-month, up 57% on Jan. 13, with five of the next seven trading days posting daily gains of 10% or more despite a disappointing preliminary earnings report from the retailer.
GameStop has not released any news to coincide with the spike, and has not responded to a request from MarketWatch for comment. The Securities and Exchange Commission declined to comment on possible investigations into the trade on Monday.
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Earlier this month, GameStop admitted that sales during the holiday season were down more than 25% and were lower than expected. Losses for the company have spiked significantly over the past two quarters, following the quarter ending in April 2020, when GameStop reported an adjusted loss of $ 1.61 per share versus the 7 cents per share in profit it recorded in the quarter from last year.