GameStop shares soar 50% as Reddit favorites rise again
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GameStop’s shares rose again Thursday as the heavily truncated stocks favored by Reddit traders await a revival.
The stock rose nearly 50% when stopped shortly after the opening bell. Following the reported fall of CFO Jim Bell, investors piled into the brick and mortar video game retailer Wednesday, sending the stock up 103.9% before trading ceased.
The company announced Tuesday that Bell would step down on March 26th. Ryan Cohen – GameStop investor and co-founder of online pet food retailer Chewy – and the board of directors reportedly forced the move to expedite the online transition.
GameStop and Cohen have largely remained calm during the volatile stock movement, despite Cohen posting a cryptic tweet Wednesday that included a photo of an ice cream cone.
Jefferies analyst Stephanie Wissink said in a note that the change may be due to GameStop’s talks with an activist investor that preceded the price hike in late January.
“We recognize that leadership changes often follow activist settlements and that Mr. Bell’s exit was mutual and not immediate and does not suggest any disagreement with the company / board,” Wissink said in a note.
The Telsey Advisory Group also said in a note that Bell performed well in that role.
“Since joining GameStop in June 2019, outgoing CFO Jim Bell has played a key role in building the foundation for GameStop’s transformation, including cutting costs, managing inventory, improving capital structure and investing in key areas like digital. We wish Mr. Bell the best for future generations Efforts, “the note reads.
GameStop was at the center of a period of market chaos in late January when retailers, led by the multimillion dollar Reddit thread WallStreetBets, rocketed shares and put a number of hedge funds on Wall Street under pressure with bets on their stock Decline.
However, some analysts have pointed out that there is also an institutional participation in the rising share price.
Another stock, AMC Entertainment, caught in the retail frenzy, rose 14% in early trading Thursday after rising 18% in the last session. The cinema chain was supported by New York Governor Andrew Cuomo, who announced that theaters in the city could open with limited capacity next month.
Earphone maker and Reddit favorite Koss Corp rose 80% in the early hours of Thursday.