GameStop and AMC go wild after an explosive rally in a single day
A GameStop store in New York.
Scott Mlyn | CNBC
GameStop and AMC Entertainment fell overnight in retail and rebounded sharply on the Thursday before entering the market after a meteoric rally amid a retail spending spree.
The stationary video game retailer’s shares fell 15.97% in expanded trading after rising more than 130% during regular business hours. In premarket trading early Thursday, its shares rebounded 30%.
The cinema chain declined 26.58% in overnight trading after stocks rose 300% in extremely strong trading. Their shares rose 13% in premarket trading.
The couple were a popular target on Reddit’s Wallstreetbets chat room, where a wave of home traders are focused on sharply shortened stocks, pushing stocks higher and crowding out hedge fund short sales.
The forum, which has more than three million members, went private briefly as moderators said they could “not ensure Reddit’s content policy”.
GameStop is up more than 400% this week alone, and increased its profits to a staggering 1,700% in January. AMC is also up over 450% this week. On Wednesday, more than a billion shares at AMC changed hands, marking the highest volume ever.
Increased speculative behavior by retail investors is raising eyebrows on Wall Street, and many have been concerned that it could be a sign of a bubble where the stock market is reaching record highs.
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