The US-based videogame retailer GameStop (GME) saga that eventually spilled into the cryptoverse just was restarted. While things might’ve been relatively quiet on that front in the past few days, the company’s stocks have jumped more than a 100% yet again before dropping sharply.
The price doubled yesterday and after surging higher today, corrected down, triggering its third trading halt for volatility in the past 24 hours. At the time of writing (15:13 UTC), it trades at around USD 92, dropping from USD 175, reached today.
Though this jump is substantial, it’s notable that the price had risen as high as USD 483 last month.
“GameStop’s surge in Wednesday’s cash session was spurred by a final-hour rally that brought its biggest advance since Jan. 29, the day Robinhood Markets restricted trading in it and 49 other stocks at the height of the frenzy,” per Bloomberg data. As to why the rally occurred, there are various explanations, including Chief Financial Officer Jim Bell being “pushed out in a disagreement over strategy,” in favour of Ryan Cohen, the co-founder of online pet-food retailer Chewy.com.
Ahhh, I was wondering why $GME was up 75% and then I realized it’s because their key holder (the Chewy founder) tweeted this picture of an ice cream cone.
Makes a lot more sense now. pic.twitter.com/E1Qw5hhjdX
— Nate Anderson (@ClarityToast) February 24, 2021
Others suggested that institutional investors might be behind the price jump.
Also on Wednesday, as the price jumped, Reddit went down for a number of users for about an hour, with the company saying that the unspecified issue has been identified and fixed and the incident cleared. This is relevant as Reddit is home to the subreddit that started the saga in the first place, WallStreetBets (WSB), but it’s unclear if a rush of traffic had had anything to do with Reddit crashing.
The WSB members, now 9.3m-strong, have been writing of a ‘revival’ and turned tables, stating that they are refuelled, ready for the round 2 and flight to Pluto, praising the hodlers and calling for continued hodling, arguing that there are bound to be bumps on the road, and one saying that “if GameStop hits 800 before 2/26 we will trigger the Mother of All Short Squeezes.”
What you see right now when sorting r/WSB by new pic.twitter.com/IVp21gjf2V
— Brian Fung (@b_fung) February 24, 2021
“It seems like the Reddit crowd is still active and when you see a bit of news like that they’re pressing again,” Keith Gangl, portfolio manager at Gradient Investments, told Bloomberg, adding: “Though I’m not sure how that’ll last.”
Meanwhile, CNBC TV host and TheStreet founder Jim Cramer suggested to GameStop in a series of tweets to purchase USD 1bn in bitcoin (BTC):
stop with the string up the hedgies, they will get what happens to them. How about my bitcoin store idea? come on it is killer! Accept bitcoin for anything. Make it a “pseudo bank. ” Gamestop sell stock: buy millions in bitcoin! make a two way market!
— Jim Cramer (@jimcramer) February 25, 2021
This comes as a number of companies, possibly most prominently MicroStrategy, Square, and Tesla, have recently invested in bitcoin as a hedge against inflation.
As reported last week, a number of the saga’s key players testified before the American House of Representatives, including Reddit CEO Steve Huffman, the under-fire Robinhood CEO Vlad Tenev, and WSB member, investor and YouTuber Roaring Kitty (real name Keith Gill).
– Crypto Traders Might Find Familiar Playbook In GameStop Hearing
– Banning Disruptive Online Groups Is A game of Whac-a-Mole
– Are GameStop-Style Surges In Crypto Any Different From Old Pumps & Dumps?
– WallStreetBets Is Disrupting Financial Markets — Possibly Permanently
– GameStop: I’m A WallStreetBets ‘Degenerate’ & It’s Just Getting Started
– GameStop and Dogecoin Show How Memes Can Move Markets
– A Reddit Army Blurs The Line Between Crypto and Traditional Finance