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GameStop (GME) +400% for week after more gains on Friday
GameStop Corporation (GME) closed 68% higher on Friday as its remarkable ascent, fuelled by retail investors on Reddit, continued even though all three major US indices tumbled during the final session of the week.
The GameStop stock frenzy has dominated headlines even outside of the financial world this week amid a battle between smaller traders on online forums and cash-rich hedge funds.
The latter’s focus on short-selling stocks has been exposed by retail investors who have bought into GameStop and other struggling companies, including AMC Entertainment (AMC), leading to those stocks soaring in price.
The situation became more volatile after trading app Robinhood briefly suspended trading of GME and other stocks as it secured $1bn from its own investors to cope with the volatility on Thursday.
That move appeared to have derailed GameStop’s surge at first, but its upward momentum continued on Friday as it ended at $325.00 on the New York Stock Exchange for weekly gains of +400%.
The huge rise for GME and other wild swings in stocks have spooked investors, according to Pepperstone’s Chris Weston.
He told Reuters: “There’s a knock-on effect that happens from targeting hedge funds, and this could have legs. … People are unsure how this social media movement plays into greater financial markets.”
House Speaker Nancy Pelosi also announced that Congress would be taking a closer look at the current stock market situation.
All three indices finished lower on Friday with the Dow Jones 2.03% off and the S&P 500 and Nasdaq dropping 1.93% and 2%, respectively.
Meanwhile, Johnson & Johnson (JNJ) slumped 4% after it revealed a 72% efficacy rate for its coronavirus vaccine following US trials, and plans to gain emergency-use authorisation this month.
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