GameStop shares are falling after rising as much as 18% within the pre-market as volatility persists in February
The WallStreetBets forum on the Reddit Inc. website on a laptop and the GameStop logo on a smartphone, located in Hastings-On-Hudson, New York, USA on Friday, January 29, 2021.
Tiffany Hagler-Geard | Bloomberg | Getty Images
GameStop shares were volatile in pre-market trading on Monday as Reddit-powered frenetic trading continues.
The stationary video game retailer’s shares rose 18% to $ 384.89 in premarket trading, but most recently fell 7% to $ 335. The stock rose 1,625% in January.
The astronomical rally has caused hedge funds short on the stock a market value loss of nearly $ 20 billion, according to S3 Partners. However, many short sellers hold onto their bearish positions.
Robinhood and other trading apps continue to restrict purchases of GameStop stock and options contracts and other heavily abbreviated names after a week of highly volatile trading due to a retail frenzy spearheaded by the 5 million Reddit thread “WallStreetBets”. “”
Restrictions also apply to AMC Entertainment, BlackBerry, Koss, Express, 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, with the expectation that the market value will drop below that level when it is time to pay for the borrowed shares.
– CNBC’s Yun Li contributed to this report.