(ATF) GameStop shares more than doubled in afternoon trading on Wednesday February 24 in a surprise revival of buying interest after a frenzy of retail investor interest in the stock seemed to have peaked in late January.
GameStop shares were up 60% after US trading hours at around $146, following a 103% rise during the day’s trading.
Trading in GameStop was halted several times following a rally that began around 2:30pm US Eastern time on Wednesday with no obvious catalyst.
Analysts that follow the stock could not point to one single reason for the sharp move, offering reasons that included a corporate reshuffle.
“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,” Joseph Feldman, an analyst at Telsey Advisory Group told Reuters.
CFO resigns
Stephanie Wissink, an analyst at Jefferies Research, referred to a report she wrote following the resignation of GameStop CFO Jim Bell, which was announced by the company late on Tuesday.
“We expect GME to pursue a CFO with a more extensive tech (vs. retail) background, which will be a signal of the direction the company is due to take in coming years,” Wissink wrote in her note.
The rally on Wednesday also seemed to take some posters on Reddit’s popular WallStreetBets forum by surprise.
“Why is GME going back up. Is it Melvin covering?!,” one user wrote.
In January shares of GameStop soared more than 1,600% as retail investors bought shares to punish hedge funds such as Melvin Capital that had taken outsized bets against the company. Melvin Capital said it lost 53% before closing its position in GameStop.
Other so-called “stonks” – an intentional misspelling of stocks – favoured by retail traders also drove higher in Wednesday afternoon trading. AMC Entertainment Inc gained 18%, while BlackBerry rose nearly 9%. Shares of Canadian cannabis company Tilray gained nearly 13%.
The retail trading frenzy was the subject of hearings in Washington last week, where Keith Gill, a Reddit user and YouTube streamer known as Roaring Kitty who had boosted the stock with his videos, reiterated that he was a fan of the stock.
Shares of GameStop remain far below their all-time high of $483 reached on January 27, despite Wednesday’s rally to $146.
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