Shares of the Gamestop video game store chain, which have recently become one of the favorite tools of traders from the Reddit forum, have surged in price, follows from data from the New York Stock Exchange (NYSE). Analysts cannot find an explanation for this.
At the close of the trading session on February 24, Gamestop shares were worth $ 91.71 per share, which corresponds to a rise in quotations of 103.9 percent. After the end of trading, the price of securities continued to grow and at the time of publication was equal to $ 131.6 (another 43.4 percent growth).
During the main session, trading was suspended twice by the exchange due to high volatility (variability in the price of an asset). At the same time, analysts are confident that the reason for the growth lies not in the massive closing of short positions by institutional investors (the so-called short squeeze), which provoked a sharp rise in the company’s price at the beginning of the year.
The resignation of Gamestop CFO Jim Bell, who was deemed incapable of bringing Gamestop’s technological transformation to fruition, is cited as possible reasons.
In January, the company found itself in the middle of a financial scandal, when its shares and call options (contracts giving the right to buy an asset in the future at a pre-agreed price) began to be massively bought by participants in a specialized forum on Reddit. This, in turn, led to the fact that investors, who had previously bet on a fall in quotations and sold shares borrowed from brokers (opening a short position), were forced to buy back securities, which further provoked demand for them and an increase in value.
As a result, within a short time, Gamestop shares rose in price by 1625 percent – up to $ 325 per share. However, then most of the growth was played back.