A GameStop store is pictured in the Manhattan borough of New York City. – REUTERSPIXGameStop Corp shares shot higher on Thursday after doubling in the previous session, triggering a series NYSE trading halts and leading a surprise resurgence of so-called “stonks,“ as passionate retail investors have dubbed their favourites on various online forums.
Analysts were puzzled by the new rally. Some ruled out a short squeeze like the one in January that battered some hedge funds that bet against GameStop and were forced to cover their short positions when individual investors using Robinhood and other trading apps pushed the video game retailer's shares as high as US$483.
“Short interest, though still significant, is now starting out from a different base than last time when it was more than 100%,“ said Ankit Gheedia, Head of Equity and Derivative Strategy, Europe for BNP Paribas.“There are not a lot of people who are just sitting there, ‘oh yeah, let’s for fun, let’s just short GameStop and get my head ripped off.’ The investors learn,“ said Dennis Dick, a trader at Bright Trading, on the Benzinga podcast.
GameStop was the fourth most traded stock by Fidelity's customers on Wednesday, with buy orders outnumbering sell orders nearly two to pne, as per the broker's data. Reddit discussion threads were buzzing again about GameStop on Thursday, with members exhorting others to pile in as the rally gathers steam.GameStop shares skyrocketed by more than 1600% in January as retail investors, urged on by WallStreetBets, bought the stock as a way to punish hedge funds that had taken an outsized short bet against it.
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