GameStop shares surge again as trading frenzy returns


GameStop shares have surged again, opening 180% higher on Thursday after more than doubling on Wednesday, as the trading mania that engulfed the videogame retailer last month returned.

The stock opened at nearly $170 on Thursday morning, up from a closing price of nearly $92 on Wednesday, before settling back to $147 in afternoon trading.

GameStop came back to life on Wednesday when more than 80m of its shares changed hands, a level not reached since January, as investor frenzy took hold.

The latest rally has surprised analysts who thought stability had returned to the stock after last month’s battle between online traders and Wall Street hedge funds.

“If you thought the GameStop saga was over, think again,” said Russ Mould, an investment director at AJ Bell. “January’s Reddit-inspired trading frenzy might be about to return.”

Other so-called “stonks” – an intentional misspelling of “stocks” – favoured by retail traders on sites such as Reddit’s WallStreetBets also shot higher. AMC Entertainment gained 18%, Koss rallied more than 50% and BlackBerry rose nearly 9%. Shares of the Canadian cannabis company Tilray rose by nearly 13%.

Analysts could not pinpoint one reason for the sharp move. At least one ruled out a short squeeze like that which fired the “Reddit rally” in January when small investors bought GameStop furiously to punish hedge funds that had bet against the retailer.

Some Twitter users pointed to an activist investor’s tweet of an ice-cream cone picture. Others cited factors including a reshuffling of top executives and options trading.

Shortly before 2pm on Wednesday, the activist investor Ryan Cohen, a major shareholder of GameStop and founder of, tweeted a picture of a McDonald’s ice-cream cone with a frog emoji. Some GameStop bulls wondered online whether it was a veiled message that Cohen would fix GameStop’s business, like the fast-food chain fixed its ice-cream machines.

“I don’t know what an ice-cream means,” said Michael Pachter, an analyst covering GameStop at Wedbush Securities. “People are looking for signals.”

Others pointed to the resignation of the GameStop chief financial officer, Jim Bell, as the company focuses on shifting into tech-driven sales.

“GameStop announced the resignation of its CFO last night. Some may have taken this as a good sign that RC Ventures is making a difference at the company in terms of trying to accelerate the shift to digital,” said Joseph Feldman, an analyst at Telsey Advisory Group.

Stephanie Wissink, an analyst at Jefferies Research, cited her report noting that Bell resigned after the company settled with Cohen’s RC Ventures. Her note said the chain of stores would probably signal a change in business model by going after “a CFO with a more extensive tech (vs retail) background”.

Ihor Dusaniwsky, the managing director of predictive analytics at the analytics firm S3 Partners, said short covering was “not the predominant reason for this price move … It’s mostly long-buying with short-covering sprinkled in.”

Fewer than 18m GameStop shares were shorted as of Tuesday, down from more than 70m in early January, according to S3. Some said options trading may have amplified the move.

Henry Schwartz, the head of product intelligence at Cboe Global Markets, said the most active options contracts for GameStop were in calls around the $50 and $60 strike prices, expiring Friday.

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Schwartz added that when the stock started jumping after 2.30pm, whoever had a short position in those contracts may have had to buy GameStop stock to hedge their position.

GameStop devotees on WallStreetBets expressed surprise. “Why is GME going up?” one retail trader said. “Because we like the stock,” another replied.

Another user posted: “I missed out on GME the first time, I’m not making that mistake again. TO THE MOON.”