The GameStop Corp. saga has become nothing short of a national phenomenon, hitting the doorsteps of both the administration of new President Joe Biden and Federal Reserve Chairman Jerome Powell. Each was on the receiving end of difficult questions about their take on a company that sells five used video games for $10.
The skyward march at GameStop Corp. accelerated Tuesday, almost doubling its stock during exchange hours and then soaring another 50 percent after Elon Musk’s name was reviewed in a tweet. Via a year-to-date rally that is pushing 700 percent, its market cap flew past the $10 billion marks.
Thanks to the benefit, more than 10 percent of S&P 500 stocks, including American Airlines Group Inc., Under Armour Inc., and Invesco Ltd., are now worth GameStop. It began the year with a $1.2 billion market capitalization. U.S. business shares listed on German Exchange Tradegate received 106 percent to $306 in early trading on Wednesday compared to the U.S. closing price of $147.98 on Tuesday.
Robinhood, the online trading app, is stopping users, including GameStop Corp., from making new purchases of many stocks. GME, -43.58 percent, which has risen in value in recent weeks, the company said in a blog post-Thursday, even as professional investors continue to hold significant short positions in such securities.
“We continuously monitor the markets and make changes where necessary,” the statement reads. “In light of recent volatility, we are restricting transactions for certain securities to the position closing only.”
The new strategy affects BlackBerry Ltd.’s shares, in addition to GameStop. AMC Entertainment Holdings Inc. BB, -40.56 percent, AMC, -53.82%, Bed Bath & Beyond Inc. BBBY, -35.49%, Express Inc. Koss Corp. EXPR, -55.50 percent KOSS, Naked Brand Group Ltd. -19.78 percent. NAKD, +39.05 percent, and Nokia Corp. American Depository Receipts. -26.56 percent NOK.
According to FactSet, shares in these companies rose between 26% and 3,087% during January, with the action seeming to be catalyzed by social media campaigns aimed at raising their prices and hurting skilled investors who sold them short.
Source: Marketwatch