Wall Street’s mania over GameStop is on again, at least for one afternoon. Shares in the troubled video game company more than doubled Wednesday, Feb. 24, 2021 to $91.71 apiece, the stock’s best day since Jan. 27, when it was going for $347.51 a share. (AP Photo/John Minchillo)

Wall Street’s mania over GameStop is on again, at least for one afternoon. Shares in the troubled video game company more than doubled Wednesday, Feb. 24, 2021 to $91.71 apiece, the stock’s best day since Jan. 27, when it was going for $347.51 a share. (AP Photo/John Minchillo)

GameStop shares double Wednesday after tumbling for much of February

Wall Street’s mania over GameStop is on again, at least for one afternoon

Wall Street’s mania over GameStop is on again, at least for one afternoon.

Shares in the troubled video game company more than doubled Wednesday to $91.71 apiece, the stock’s best day since Jan. 27, when it was going for $347.51 a share.

A rally in GameStop has been rare since it fell back to earth early this month. The stock, which soared 1,600% at one point in January, has been extremely volatile.. It’s down nearly 72% so far in February, though it’s still up nearly 387% this year.

Shares in AMC Entertainment, another stock hyped by online social media forums, jumped 18.1%. The movie theatre chain’s stock is up nearly 60% this month and about 329% this year.

The sudden, sharp move higher in GameStop and AMC Entertainment left even some members of Reddit’s WallStreetBets forum, which helped cheer the stocks’ meteoric rise last month, scratching their heads.

“Can we honestly sound off on what we think is happening?” wrote one Redditor. “Is there any reason for this 150% spike??” asked another.

GameStop’s wild ride shocked Wall Street, forcing the market to gird for more volatility. It prompted Congress to hold a House hearing last week into what led to the frenzy and whether smaller investors need to be shielded from taking big risks.

Individual investors on Reddit and other social media forums encouraged each other to buy GameStop, AMC Entertainment and select other stocks in a bid to hurt hedge funds that were betting the stocks would lose value. The move, known as a “short squeeze,” can lead traders who were using options to bet against a stock to abandon their bets. To do so, they have to buy shares of the stock, which pushes the price even higher.

GameStop was an extreme example because some of its shares had been sold short multiple times.

Gust Kepler, CEO of stocks and options platform BlackBoxStocks, said that he became aware around 3:30 EST Wednesday of “aggressive buying” of call options on GameStop shares. A call option gives a trader the right to buy a stock at a certain price at a later date.

“I am not certain that there’s another short squeeze going on like the one before, however, there are probably some funds who stayed short assuming the dust would settle,” Kepler said.

Another possible reason for GameStop’s sharp move: The Grapevine, Texas, company announced Wednesday that its chief financial officer will be resigning on March 26.

“The CFO exited the company and there’s talk of the company finally transforming from a brick and mortar to deploying their product in a digital way, and this is why we believe the stock shot up at the end of the day today,” Kepler said.

Some of the traders who bid up GameStop’s shares last month cited optimism that new board member Ryan Cohen, the founder of online pet store Chewy, would help turn the struggling retailer’s fortunes around.

The company has been struggling to adapt to the rise of mobile gaming and digital downloads that have rendered its more than 5,000 stores obsolete, even more so during the pandemic.

Some market watchers speculated that GameStop’s surprise reanimation was a reaction to critical comments from Charlie Munger, Warren Buffett’s right-hand man.

Speaking at the annual meeting of Los Angeles Daily Journal Wednesday, the Berkshire Hathaway vice chairman pinned the GameStop stock frenzy on small investors that he said were gambling on the stock market.

“That’s the kind of thing that can happen when you get a whole lot of people who are using liquid stock markets to gamble the way they would in betting on race horses,” Munger said.

The remarks didn’t win Munger many admirers on WallStreetBets. One Redditor posted a chart in the forum showing the spike in GameStop’s shares, adding: “TAKE THAT CHARLIE MUNGER.”

Stocks

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Old English design elements can be seen in the sign of the Summerland Farm and Garden Centre in 1993. The guidelines are no longer in place, but some downtown businesses still show aspects of the days when Summerland had a theme in place. This photo was taken by Summerland photographer Dan Dorotich. (Photo courtesy of the Summerland Museum)
Summerland’s Old English theme has been abandoned

From the 1980s until the early 2000s, Summerland had design guidelines in its downtown

Penticton bylaw officers tore down a “pretty significantly sized” homeless camp underneath the bridge near Riverside Drive Friday, April 16 morning. (Brennan Phillips - Western News)
Penticton bylaw tears down ‘significantly sized’ homeless camp under bridge

Many residents had made complaints about the camp before it was torn down

Through their Simple Generosity campaign, Valley First has pledged to donate $1 million of community support to British Columbia communities in 2021. (Contributed)
Valley First rewarding Penticton families with innovative way to thrive together

Participants with ‘inspiring ideas’ will receive a surprise for their family, valued at up to $2,500

Elvira D’Angelo, 92, waits to receive her COVID-19 vaccination shot at a clinic in Montreal, Sunday, March 7, 2021, as the COVID-19 pandemic continues in Canada and around the world. THE CANADIAN PRESS/Graham Hughes
110 new cases of COVID-19 in Interior Health

Provincial health officers announced 1,005 new cases throughout B.C.

Ryan Upson’s first BCHL hat-trick propelled the Vees to a 7-1 stomping of the Cranbrook Bucks Thursday April 16) night to improve their record to 7-1-0-0 in this abbreviated pod season. (Cherie Morgan/Cherie Morgan Photography)
Pentiton Vees bounce back with big win over Bucks

Vees score five in under five minutes, win 7-1 over Cranbrook

Flow Academy is located at 1511 Sutherland Avenue in Kelowna. (Michael Rodriguez - Capital News)
Black Press Media Weekly Roundup: Top headlines this week

Here’s a quick roundup of the stories that made headlines across the Okanagan, from April 11 to 16

Vancouver Police Const. Deepak Sood is under review by the Independent Investigations Office of B.C. after making comments to a harm reduction advocate Sunday, April 11. (Screen grab)
VIDEO: Vancouver officer convicted of uttering threats under watchdog review again

Const. Deepak Sood was recorded Sunday saying ‘I’ll smack you’ and ‘go back to selling drugs’ to a harm reduction advocate

Provincial health officer Dr. Bonnie Henry prepares a daily update on the coronavirus pandemic, April 21, 2020. (B.C. Government)
B.C.’s COVID-19 infection rate persists, 1,005 new cases Friday

Hospitalization up to 425, six more virus-related deaths

Ford F-350s have been targeted in the North Okanagan by auto thieves since February 2021, Vernon North Okanagan RCMP data shows. (Gene J. Puskar - The Canadian Press/AP file)
Auto thieves target older Ford F-350s in Vernon: RCMP

Vernon Mounties remind all motorists no vehicle is immune to auto crime

The Nautical Dog Cafe at Skaha marina is getting its patio ready in hopes Mother Nature will provide where provincial restrictions have taken away indoor dining. (Facebook)
‘A lot of instability’: B.C. restaurants in layoff limbo

As COVID-19 cases stay high, restaurants in British Columbia are closed to indoor dining

Prime Minister Justin Trudeau looks on as Deputy Prime Minister and Finance Minister Chrystia Freeland responds to a question during a news conference on Parliament Hill in Ottawa, Tuesday, Aug. 18, 2020. THE CANADIAN PRESS/Adrian Wyld
Expectations high as Trudeau Liberals get ready to unveil first pandemic budget

The Liberals will look to thread an economic needle with Monday’s budget

Coldstream students took over the Your Letters page in the April 9, 2021, edition of the Vernon Morning Star to offer advice to adults about COVID-19. Interior Health took notice and offered their praise. (Vernon Morning Star)
‘We can get rid of COVID together’: B.C. kids share heartwarming advice

Grade 2 and 3 classes from a North Okanagan elementary took over Letters page of this Black Press newspaper

Royal Inland Hospital in Kamloops. (Dave Eagles/Kamloops This Week file photo)
RCMP intercept vehicle fleeing with infant taken from Kamloops hospital

The baby was at the hospital receiving life-saving care

Vernon North Okanagan RCMP were present at the McDonalds in Armstrong Thursday, April 15, 2021. (Tomer Joury - Facebook)
Police handle ‘high-risk’ situation at Armstrong residence

A woman was apprehended and taken to hospital under the Mental Health Act; no charges laid

Most Read