If you thought the meme-stock rollercoaster had reached its craziest twists and turns, you were proved wrong Wednesday.
GameStop Corp. shares were on track for their highest closing price in history and their longest winning streak since the videogame retailer’s stock became the poster child for Reddit-inspired investment frenzies, but suddenly plunged and lost more than a third of their value while being halted repeatedly, then headed back toward the top. Other meme stocks followed a similar pattern — gains in the morning, sudden plunges just after noon Eastern time, and an afternoon recovery.
shares traded 5% to 36% higher in Wednesday’s morning session, including topping the stock’s Jan. 27 record close of $347.51 with an intraday high of $348.50. If the shares finish higher on the day, it would result in a six-session winning streak for the stock, which would be the longest since Sept. 3, 2020, when the stock finished higher eight days in a row, according to Dow Jones Market Data Group.
That was well before GameStop’s stock became a household word starting in January, when buy-and-hold investors on Reddit’s WallStreetBets forum rallied against Wall Street firms betting heavily against the stock, making it one of the most shorted stocks out there. Recently, one analyst charted a strong correlation between the volume of chatter on WallStreetBets and GameStop’s share price.
Prices plunged just after midday, however, losing more than $100 a share in a matter of minutes and falling as low as $172 as trading was halted seven times between 12:20 and 1:15 p.m. But the price turned around toward the end of that streak of halts, and shares were trading for $284.65 at 1:30 p.m. Eastern — more than 15% higher than Tuesday’s close, which was the third highest closing price in GameStop’s history.
shares also saw gains in the morning session suddenly disappear after noon, then headed higher after the plunge, at different scales. AMC, for example, gained nearly 19% in morning trading, plunged to a daily decline of nearly 10% between noon and 1 p.m. Eastern, then bounced back to around even on the day in the afternoon. The theater chain is scheduled to release quarterly financial results after the day’s trading ends.
By midday, GameStop trading volume had surpassed 32 million shares, compared with a 10-day average daily volume of 59.5 million and a 52-week average daily volume of 14.9 million. The company had been commanding its highest market cap since January at a valuation of more than $23 billion. Last week, GameStop settled just shy of a $10 billion cap, following a weekly gain of 35%.
Prior to that, GameStop logged its second best week ever with a 150% gain, compared with its 400% weekly rally back in late January. The four best weekly gains for the stock occurred between a six-week period in 2021 as investors targeted the stock en masse.
Results for GameStop’s fourth quarter, which includes holiday sales, are scheduled for March 23 after markets close. Back in January, the company gave a sneak peek showing that e-commerce sales surged more than 300% but overall sales declined in the holiday season.
GameStop shares are up more than 1,700% this year alone, and up more than 8,000% over the past 12 months. By comparison, the S&P 500 index
has increased 4% in 2021 and is up 35% over the past 12 months.