World

GameStop shares climb 6% in pre-market trade as frenzy continues into February

The WallStreetBets forum on the Reddit Inc. website on a laptop computer and the GameStop logo on a smartphone arranged in Hastings-On-Hudson, New York, U.S., on Friday, Jan. 29, 2021.

Tiffany Hagler-Geard | Bloomberg | Getty Images

GameStop shares climbed in pre-market trading on Monday as the Reddit-fueled short-squeeze on Wall Street hedge funds looks set to continue.

Shares of the bricks-and-mortar video game retailer gained around 6.5% in early pre-market deals, with the stock having surged 1,625% over the month of January.

The astronomical rally has inflicted a mark-to-market loss of almost $20 billion to hedge funds with short positions against the stock, according to data from S3 Partners. However, many short-sellers are holding onto their bearish positions.

Robinhood and other trading apps continue to limit buying of GameStop stocks and options contracts, along with those of other heavily-shorted names, following a week of hugely volatile trading due to a retail trading frenzy led by 5 million-strong Reddit thread “WallStreetBets.”

Limitations are also in place for AMC Entertainment, BlackBerry, KossExpress, Nokia, Genius Brands International and Naked Brand Group.

Short selling is a strategy in which investors borrow shares of a stock at a certain price on expectations that the market value will fall below that level when it’s time to pay for the borrowed shares.

— CNBC’s Yun Li contributed to this report.


Source link

Related Articles

Back to top button