The shares of video game retailer GameStop continued to rally on Wednesday, after hitting the highest point since the end of January, and pushing the company’s market cap back above $17 billion.
The stock has skyrocketed more than 108 percent over the past five trading sessions, including Tuesday’s 27-percent gain. Shares closed Tuesday’s regular session at $246.90, down from a record close of $347.51 on January 27. They were up 18 percent in pre-market trading on Wednesday.
GameStop shares are up over 1,200 percent, year to date, and have soared 5,700 percent over the past 12 months. After a steady growth in February, they started spiking again this week as GameStop announced a new strategy committee to identify ways to accelerate its transformation, which will be led by activist investor and Chewy co-founder Ryan Cohen.
The GameStop stock market saga began in January, when a speculative buying frenzy swept the market. A wave of stay-at-home traders used social media, in this case Reddit’s WallStreetBets forum, to coordinate massive short squeezes. Shares of GameStop then catapulted to as high as 483 percent, closing out January with a 1,625 percent rally. As a result, Wall Street hedge funds that shorted the stock lost billions.
Redditors also coordinated short squeezes of other stocks, as shares of American basic cable television channel AMC surged 277 percent, and those of headphone maker Koss rose over 1,800 percent.
The buying frenzy subsequently became the focus of a congressional hearing, at which Robinhood CEO Vlad Tenev denied any collusion with hedge funds to stop the buying of the video game retailer’s shares on its platform. The brokerage firm had restricted buying the stock on January 28, with shares then starting to dip. Declines continued as restrictions were eased in the days that followed.
On Wednesday, the Senate Banking Committee started hearings into financial speculation and the easy-trading practices of Robinhood and other zero-commission firms that, combined with chatter from Reddit forums, helped fuel the historic buying of heavily shorted stocks.
For more stories on economy & finance visit RT’s business section