GAMESTOP stocks rose again as share prices more than doubled sparking trading to be halted twice on Wednesday and Reddit to crash.
Shares of GameStop surged more than 104 percent on Wednesday, until trading was halted for a second time moments before the market closed.
GameStop stocks surged by more than 104 percent on WednesdayCredit: AP:Associated Press
The gaming company’s shares continued to surge in after hours trading Wednesday evening, raising by another 83 percent.
The rapid rise came as Reddit – the home of Redditors WallStreetBets, who managed to send the shares for GameStop skyrocketing in January – went down temporarily.
On Wednesday, Reddit was down for many users, however the company did not say what caused the outage and instead said it had identified the issue, fixed it and that “systems are beginning to recover”.
The sudden jump came one day after the company announced its chief financial officer Jim Bell would resign next month to help “accelerate GameStop’s transformation”.
GameStop’s stock price on WednesdayCredit: Google
GameStop’s shares rose by another 83 percent in after hours trading Wednesday eveningCredit: Rex Features
In a press release, GameStop said the company had “initiated a search for a permanent Chief Financial Officer with the capabilities and qualifications to help accelerate GameStop’s transformation.
“A leading executive search firm has been retained to support the process. Internal and external candidates will be evaluated,” the company added.
Senior Vice President and Chief Accounting Officer Diana Jajeh will serve as interim Chief Financial Officer while GameStop finds a replacement for Bell.
Bell joined the team along with CEO George Sherman in 2019 as the videogame retailer underwent financial straits.
In late January, GameStop shares surged 700 percent – thanks to Redditors WallStreetBets – in a move that left major hedge funds reeling from billions of dollars in losses.
The members of the group banded together to “squeeze short-sellers,” where short sellers betting against GameStop were forced to buy more GameStop stock to cover their losses.
That pushed the price up even more, which forces more short sellers to cover their losses, which pushed the price up even more.
In January, the Reddit group WallStreetBets managed to drive GameStop’s stock by 700 percentCredit: Reuters
The groups efforts drove the value of GameStop shares up by 1,529 percent from January 12 through January 29, and caused a threat for a number of hedge funds.
One such fund was Melvin Capital, which lost more than 30% in the first few weeks of this year, at least partially due to its bet against GameStop.
The losses forced the fund to take a $2.75 billion cash infusion from fellow hedge funds Citadel and Point72 Asset Management.