GameStop shares rise slightly, still down more than 70% for the week
- Shares of the bricks-and-mortar video game retailer surged 1,625% in January and 400% just last week, as traders led by Reddit thread WallStreetBets piled into the stock.
- But the momentum collapsed earlier this week.
- Gamestop stock dropped 60% on Tuesday and it has lost more than 70% of its value since Friday.
GameStop shares held on to a slight gain in volatile trading on Wednesday, but the retail trader favorite was unable to recoup its dramatic losses from earlier in the week.
Shares closed up 2.7% at $92.41 per share, still more than $230 per share below where the stock closed on Friday. The stock swung between gains and losses during premarket trading and the regular session, receiving a boost when the company announced a group of senior level hires focused on e-commerce.
GameStop announced that Matt Francis, who has worked at Amazon Web Services and QVC, would become the company's new chief technology officer later this month. The company also announced two new vice presidents with e-commerce experience.
Shares of the bricks-and-mortar video game retailer surged 1,625% in January and 400% just last week, as traders led by Reddit thread WallStreetBets piled into the stock.
But the momentum collapsed earlier this week. Gamestop stock dropped 60% on Tuesday and it has lost more than 70% of its value since Friday, even when including Wednesday's meager gains.
Keith Gill, AKA Reddit's DeepF------Value, posted on Tuesday that he is still not selling despite suffering a $13 million loss that day.
AMC Entertainment, another heavily shorted stock that was also targeted by Reddit traders, gained 14.7% on Wednesday.
The trading in heavily shorted stocks has been marked by trading restrictions from brokerages over the past week. Free-to-trade broker Robinhood said on Wednesday that only GameStop and AMC still had restrictions.
Many Wall Street hedge funds began short-covering toward the end of last week after taking significant losses in the squeeze. Short selling is a strategy in which investors borrow shares of a stock at a certain price on expectations that the market value will fall below that level when it's time to pay for the borrowed shares.
The short interest, or percentage of the stock's float that are sold short, was still 51.7% for GameStop as of Wednesday, according to financial data firm S3 Partners. Short interest for AMC was at 13.6%.