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GameStop tumbles, Clover Health rises in ‘meme stock’ roller coaster



A person walks past a GameStop in the Manhattan neighborhood of New York City, New York, USA, January 29, 2021. REUTERS / Carlo Allegri / File Photo

Shares in GameStop Corp (GME.N) fell 7% and Clover Health Investments Corp (CLOV.O) jumped 6.4% in early trading on Thursday, setting the stage for another roller coaster session for stocks preferred by small investors on social media platforms.

Video game retailer GameStop on Wednesday named the head of Amazon.com Incs (AMZN.O)’s Australian business as its CEO and said it might sell new shares after reporting quarterly results that were stronger than analysts expected. Read more

GameStops shares traded at around $ 281 pre-market after closing Wednesday at $ 302.56, almost levels hit in January when a Reddit-driven frenzy sent its stock up 1,600%. Read more

“This latest chapter of the meme warehouse mania seems to be the typical pump and dump trade,” said Edward Moya, a senior market analyst at OANDA who identified e-commerce firm ContextLogic Inc (WISH.O) and Clean Energy Fuels Corp (CLNE). O) as the new target for retailers.

The shares in the two companies rose by 5.8% and 4.2%, respectively.

“This madness is likely to remain a viable option for some traders if the S&P 500 index makes weaker movements and continues to hover around record highs,” Moya added.

Shares of cinema operator AMC Entertainment Holdings Inc (AMC.N) fell 4.1%, while prison operator Geo Group Inc (GEO.N), the latest “meme stock”, fell 8.8% after rising more than 38% on Wednesday .

The rally in heavily short-circuited U.S. equities, which has also lifted shares in Medicare-backed insurer Clover and AMC, has alerted the U.S. Securities and Exchange Commission (SEC).

GameStop said Wednesday that the SEC had requested documents and information related to an investigation into this trade.

Clover, which had a short interest rate of 43.5% on Tuesday’s free float, rose 6.4% to around $ 18.01 before the clock. It ended Wednesday at $ 16.92 after hitting a record high of $ 28.85 during the session.

In the last two weeks, the so-called “meme stocks” have received $ 1.27 billion in retail inflows, Vanda Research said Wednesday. It matched their peak in January when the rise in GameStop stocks put pressure on short sellers and further increased the stock price.

Our standards: Thomson Reuters Trust Principles.


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