GameStop shares surged again on Wednesday, rising 19.1% and notching their highest close in three weeks following a 5.4% decline on Tuesday.
The video game retailer's stock closed at $31.57, its highest level since May 15, 2024, when it finished at $39.55. GameStop shares have now risen in four of the last five trading sessions.
Last month, influential trader Keith Gill, known by the moniker Roaring Kitty on social media, ignited a new meme stock rally, leading to a sharp rise in both AMC Entertainment and GameStop shares, along with several other stocks.
GameStop and AMC were central to the original meme-stock frenzy in 2021, which brought Gill to prominence.
AMC shares also saw gains, closing up 7.5% on Wednesday after a 0.4% decline on Tuesday.
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GameStop shares saw another boost on Monday after a Reddit post from an account linked to Gill appeared to show him holding a substantial stake in the company. A follow-up screenshot on Monday appeared to confirm Gill’s position.
Several prominent media outlets, such as MarketWatch, could not verify the authenticity of these screenshots. Also on Monday, Gill posted a cryptic message on X, formerly known as Twitter, featuring a green “reverse” card from the card game Uno.
There appeared to be no fundamental reason for the sharp gains in GameStop shares — or any other similar stocks, such as AMC — when the meme stock rally came to life in mid-May, as per a comment from Markets.com Chief Market Analyst Neil Wilson:
“Short interest in GME stood at 24% before the fireworks, so we can assume a fair chunk of the move is short-covering action chasing the initial move up, plus some hedgies will have had calls on their shorts.
Trend following and momentum strategies may have helped. And it looks like retail investors are becoming more bullish again and willing to take on more risk. There is no fundamental reason for the move as such — GameStop’s last earnings report was abysmal”.
On Tuesday, a spokesperson for Massachusetts Secretary of State Bill Galvin told MarketWatch that the state's securities division is "looking into" Gill's trading activities.
The Wall Street Journal reported that the Securities and Exchange Commission is reviewing trading in GameStop call options around the time of Gill’s social media posts. However, it remains unclear if the SEC is specifically investigating Gill.
Gill has not responded to requests for comments on the Massachusetts investigation or the SEC’s reported review.
With markets climbing again this year, trading firms like Charles Schwab and Robinhood Markets have reported an increase in new accounts and activity from retail investors —individuals not employed by investment houses or other private firms.
GameStop capitalized on this renewed interest last month by raising $933 million through a share sale.
However, this surge in activity has caused some concern within the financial industry and in Washington, which held hearings on the GameStop phenomenon in 2021.
In an interview last month with CNBC, former financial regulator Jay Clayton, who led the Securities and Exchange Commission under former President Donald Trump, likened the activity to gambling:
“It bothers me on many levels. It's a lot closer to gambling than it is to trading and it's certainly not investing. Is this something we should be tolerating in our markets? Whether it's legal or illegal, I don't think so”.
GameStop shares have risen 80.1% so far this year, while AMC Entertainment stock has dropped 15.9%. The S&P 500 index has gained 12.3% during the same period.
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