Tiffany Hagler-Geard | Bloomberg | Getty Images
GameStop shares rose in volatile early trading on Wednesday as investors and traders waited to see if the short squeeze could regain momentum.
The stock was down more than 11% on Wednesday morning but was in the black just after 5 a.m. The stock gained 14% at around 1:15 p.m. ET, but was still more than $ 200 per share lower than last week.
GameStop announced that Matt Francis, who worked at Amazon Web Services and QVC, will become the company’s new chief technology officer later this month. The company also announced two new Vice Presidents with e-commerce experience.
The stationary video game retailer’s shares rose 1,625% in January and only rose 400% last week when traders, led by Reddit thread WallStreetBets, piled into the stock.
But the momentum collapsed earlier this week. Gamestop stock fell 60% on Tuesday and has lost more than 70% of its value since Friday.
Keith Gill, DeepF —— Value of AKA Reddit, announced Tuesday that despite a loss of $ 13 million that day, it still hasn’t sold.
Another sharply shortened stock that Reddit traders were also targeting, AMC Entertainment, gained 8% in early trading.
Trading in sharply shortened stocks was marked by trading restrictions from brokers last week. Free-to-trade broker Robinhood said on Wednesday that only GameStop and AMC still have restrictions.
Many Wall Street hedge funds began short covering late last week after suffering significant losses. Short selling is a strategy in which investors borrow shares of a stock at a certain price, with the expectation that the market value will drop below that level when it is time to pay for the borrowed shares.
According to financial data firm S3 Partners, GameStop’s short selling rate, or short selling percentage, was 51.7% on Wednesday. Short interest in AMC was 13.6%.
