Amateur stock traders made a concerted effort to buy shares of companies shunned by Wall Street, challenging short positions by hedge funds, and costing some professionals billions of dollars on their bearish bets and inflating stock valuations.
The GameStop effect has snowballed, with a number of downtrodden stocks surging thanks to the buying frenzy that started with GameStop. Heavy buying by retail investors sent shares of the video game retailer soaring, forcing big funds including Andrew Left’s Citron to cover short positions, incurring hefty losses.
Below are some of the stocks involved:
** GameStop: Institutional investors bet against the video game retailer’s model, but the company’s announcement on Jan. 11 that it was changing its board and doubling down on digital sales, boosted the stock. Short sellers scrambled to cover their positions, which in turn attracted a spate of further retail buying. GameStop stock was last up 134.8% for the session, extending its year-to-date gain of 685.5% as of Tuesday’s close.
** Blackberry announced it was expanding its partnership with China-based search platform Baidu Inc, but the Canadian company said it was not aware of any reason behind its rally. The stock was last up 32.7%, extending its 185.4% year-to-date advance
** AMC Entertainment Holdings’ stock started its ascent after saying bankruptcy talks were “completely off the table.” So far this year, the movie theater operator’s stock was up 134% as of Tuesday’s close. On Wednesday, its price was last up 301.2%
** Bed Bath & Beyond continued to rise even after Wedbush downgraded the retailer to “neutral” after an “extraordinary two days of trading.” Its shares were last up 43.5%, building on its 107.6% jump since the last closing price of 2020.
** Pharmaceutical firm CEL-SCI Corp shares jumped 72.5% in a session fraught with multiple trading halts due to volatility. This added to its 24% gain so far this year.
** Finland-based Nokia announced on Wednesday it was unaware of any reason why its shares joined the short squeeze stampede. It was last up 38.5%, extending its 21% jump year to date.
** Consumer electronics company Koss Corp was caught in the mania. Most recently its shares were soaring by 480.0%, building on its 190.7% advance so far in 2021.