Market observers were left bemused by another spike in shares in GameStop on Thursday as stocks in the retailer rose more than 20% at one point with no obvious catalyst.
GameStop shares closed up 6.4% at $131.93 after earlier hitting $147.87, their highest since a surge in the heavily shorted stock late last month.
One analyst and some Twitter users pointed to a cryptic tweet by Ryan Cohen, a major shareholder of GameStop and founder of e-commerce firm Chewy.com, as a plausible reason for the move.
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The late afternoon rally in GameStop began roughly around the time that Cohen tweeted what appeared to be a screenshot with the puppet dog advertising mascot of Pets.com, a famous casualty of the dotcom bubble two decades ago. Cohen and GameStop had no comment on the tweet.
The tweet was “as good an explanation as any” for the sudden surge in GameStop shares, said Wedbush Securities analyst Michael Pachter.
“The core ‘story’ is that he will change the company and reverse its fortunes, so anything he does to reinforce that change… is going to move the stock higher,” he said.
MEME STOCKS
GameStop has become one of the most visible of the so-called meme stocks that are closely followed on sites such as Reddit’s popular WallStreetBets forum.
The stock surged more than 1,600% in January after a wave of buying forced investors betting against the company’s shares to unwind their positions, before paring most of those gains the following month.
Wall Street ended sharply lower on Thursday, leaving the Nasdaq down around 10% from its February record high.
- Reporting by Reuters
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