GameStop’s six-day winning streak was on track to come to an end Thursday after a wild market session that had Reddit traders on the edge of their seats.
The video-game retailer’s stock price dropped about 4.8 percent in premarket trading to $252.32 as of 7:57 a.m., setting it up to wipe out much of the gain it eked out a day earlier.
GameStop shares ended Wednesday up 7.3 percent at $265, the highest closing price since Feb. 1. But the stock took a roller-coaster ride to get there by climbing as high as $348.50 and crashing more than 40 percent in about half an hour before recovering.
Trading on GameStop was halted seven times over the course of the session before the stock managed to notch its second-highest closing price ever, according to MarketWatch.
The crazy moves gripped rookie investors on Reddit’s WallStreetBets forum, which pushed GameStop shares as high as $483 in late January in a populist campaign against hedge funds that had bet the stock would fall.
“I want to genuinely hear how fun today was for you apes that are balls deep with me in [GameStop],” a Redditor named chuqz wrote in a Wednesday evening post that got 3,500 “upvotes” on the forum. “I needed a rush like today. I had a blast.”
It’s unclear what sparked Wednesday’s massive volatility. But it came amid a rally that picked up steam early this week after GameStop confirmed it had tapped Chewy.com founder Ryan Cohen — whom some fans view as the company’s likely savior — to spearhead its shift into e-commerce.
If GameStop’s latest bounce is anything like its unprecedented January surge, the stock could be in for a major crash. The Texas-based company’s shares fell as low as $38.50 on Feb. 19, less than a month after the peak of the rally that turned Wall Street upside down and sparked congressional hearings.
The stock could face another test on March 23, when GameStop is slated to report financial results for the fourth quarter of its 2020 fiscal year, which included the holiday shopping season.
Wall Street analysts are expecting GameStop’s adjusted profits for the quarter to jump about 13 percent to roughly $1.43 per share on revenues of about $2.3 billion, according to Bloomberg data.