GameStop surges more than 18%, other 'meme stocks' mount late-day rally

Topics Reddit | Wall Street | Markets

At one point, GameStop, which closed at $120.40, reached a session peak of $133.99. Its low for the day was $99.97.

By Sinead Carew and Lewis Krauskopf

(Reuters) - GameStop and other "meme stocks" mounted a late-day rally on Monday, with shares of the video game retailer climbing nearly 32% at one point on little apparent news.

Shares of the videogame retailer, along with other stocks favored by retail investors congregating in online forums such as Reddit's popular WallStreetBets, have roared back in recent sessions after a wild ride in which they soared in late January and tumbled early last month.

Along with GameStop, which pared gains to close up 18.3%, cinema chain AMC Entertainment finished up 14.6% and headphone maker Koss added 13.4%.

At one point, GameStop, which closed at $120.40, reached a session peak of $133.99. Its low for the day was $99.97.

Some analysts said a tick higher in short positioning from last week may have provided some fuel for the rally. A short squeeze - in which a flurry of buying forces bearish investors to unwind their bets against the stock - was a key catalyst behind GameStop's late January run, when it gained as much as 1600% before reversing.

The number of GameStop shares shorted stood at 17.74 million, analytics firm S3 Partners said on Monday, with short interest accounting for about 32.6% of the float, compared with about 26% a week earlier, according to S3 Partners. Short interest peaked at 142% in early January, S3 data showed.

"We're definitely seeing some of the shorts who came on over the past week probably covering and it's helping boost today's rally," said Ihor Dusaniwsky, managing director of predictive analytics at S3. "Looking at today's price movement, I'm sure these big red numbers are going to be chasing out quite a few shorts out of their positions."

GameStop short sellers were down $331 million in mark-to-market losses on Monday, bringing year-to-date mark-to-market losses to $5.1 billion, according to Dusaniwsky.

More than 48 million shares in GameStop changed hands, with volume surpassing the 10-day moving average. So far the stock is up 539% year-to-dated. However, it was still below its Jan.28 peak of $483.

 

(Reporting by Sinead Carew and Lewis Krauskopf; Editing by Ira Iosebashvili and Dan Grebler)


(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)


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