Amateur investors noticed $350 as some kind of magic number as to when the GameStop stock shakes up as amateur investors-turned-stock market activists once again stuck it to hedge funds with a new "mega squeeze."
It was at $246.90 USD at the end of the trading day March 9th. At 12:27 PM today, March 10th, the stock peaked at $346.76, only to erase nearly the entirety of those gains by 12:41 PM, crashing to $198. The volatility rollercoaster continued coming out slightly ahead, as GME hit $263.05.
If this were any other stock on the market, there’d be an investor uproar clamoring for answers. But for the quintessential “meme stock” of 2021 it’s par for the course.
The latest round of media coverage resembled the initial January frenzy when the “STONK” sensation first made waves.
JJ Kinahan is the chief market strategist over at Ameritrade and he told this to Bloomberg regarding today’s activity: “I think you’re running into a burning building -- that’s truly the easiest way to say it. You can be a hero but you can also be the guy who they’re holding a funeral for.”
In terms of the immediate, there’s an explanation as to what happened. According to Trevonious on Reddit's WallStreetBets, the central hub for today's populist stock market-related activity, today's landslide dip comes as a huge amount of shorts were borrowed over the past few days.
"Hedgies were borrowing shorted shares, iron handing them, borrowing more, and then they released them all at once (or in large chunks because of the halts). That allowed them to tank the price in a very direct and focused manner, say $160 in a matter of 20 minutes (and that includes the halt times). I believe this was an attempt to trigger stop losses and scare day-traders into selling.”
But there’s signs of business life for GameStop long-term. Chewy cofounder Ryan Cohen is the head at RC Ventures, which now has a 12% in GameStop.
A Business Insider piece details the plans Cohen has to reinvent the retail chain for the modern age. For that to happen he wants the company to pivot towards technology and digital experiences. Cohen has started enacting change in the leadership by bringing on a new CTO in Matt Francis and forcing out Jim Bell as CFO. But most importantly Ryan Cohen has formed a new committee dedicated to planning for GameStop’s future, with the focus of it being on brainstorming innovation.
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