GameStop Inc (GME) shares ended the day at $107.74, a 104% increase on February 24. The last time trading in shares of the network closed near this mark on February 3. Following the exchange trading, investors continued to purchase GameStop shares, which resulted in another 87.5% increase of quotes on the postmarket.
The New York Stock Exchange reported an unexpected rise in the company’s stock in the afternoon of February 24. Besides, extremely high volatility in the stock market caused the suspension of GameStop stock trading twice.
The reason for the surge could not be pinpointed by the analysts surveyed. Those companies that pump up their stocks on so-called memes in January could suffer another short squeeze, said Igor Dushanivsky of the investment firm S3 Partners.
In January, the value of GameStop Inc (GME) shares surged by 1625% over one month, from $ 18.8 to $ 325. A flash mob on the Reddit forum led to the growth of GameStop securities. To “punish” hedge funds that bet on a drop in the stock’s value, the users decided to “warm-up” the company’s securities. Besides GameStop, private investors began purchasing other companies as well. As a result, hedge funds suffered due to quoted prices rising rapidly. Consequently, the companies suffered a severe collapse of their shares.
Experts suggest that GameStop CFO Jim Bell’s resignation, which became known on Tuesday, could explain the growth. Bell is expected to leave office on March 26. He will be leaving at the company’s request. Bell’s methods do not fit GameStop’s revamped business model since its business model is updating its business model to accommodate new technology.
One of GameStop’s largest shareholders, activist investor Ryan Cohen, is believed to have been the catalyst that caused Jim Bell’s departure. This is reported in CNBC. Cohen’s appointment as GameStop’s director kicked off a rally in its stock price earlier this year, while the company’s announcement led traders on Reddit awry.
On Wednesday, along with GameStop Inc (GME), other meme companies’ shares surged. Koss Corp, the maker of headphones, and Canadian smartphone maker BlackBerry rose more than 50%. Cinema chain AMC Entertainment Holdings rose 18%.