#GameStop stock explodes for second day, Reddit cheers

GameStop’s stock price exploded again Thursday as Reddit’s army of retail traders launched a second salvo in its rebellion against Wall Street.

Shares in the video-game retailer surged 101 percent to an intraday peak $184.64 after more than doubling in a wild Wednesday session, adding as much as $9.7 billion to its market value in just two days.

GameStop pared the gain to about 61 percent as of 2:12 p.m. Some other companies that rookie investors pumped up in January also surged — beleaguered cinema chain AMC Entertainment climbed as much as 21 percent to $11, while headphone maker Koss nearly doubled to $35.05 and was recently trading up 49 percent.

But GameStop was still the favorite on WallStreetBets forum, where traders celebrated the massive move in a stock they turned into a symbol of a populist uprising against hedge funds and big-time investors.

“Who’s putting billboards up again???? I love the stock!!!!” a Redditor named immya124 wrote on the message board Thursday.

“GME is what separated the men from the boys,” Carl95M posted, referring to GameStop’s ticker symbol and adding two of WallStreetBets’ favorite emojis: a rocket and a diamond.

It’s unclear what sparked the meme stock revival after about two weeks of muted trading. One potential catalyst might have been a cryptic Twitter post from GameStop board member and investor Ryan Cohen, the Chewy.com co-founder who some fans see as key to improving the company’s fortunes.

The tweet, posted about two hours before the markets closed on Wednesday, featured a photo of a McDonald’s ice cream cone and was captioned with a lone frog emoji. 

Traders on Twitter and Reddit speculated wildly about its meaning. Some thought Cohen was hinting that he would fix GameStop by likening the company to McDonald’s notoriously unreliable ice cream machines. 

Some claimed it was a sign that he would be named GameStop’s chief executive, pointing to an anecdote about Chewy’s first board meeting including “a trip to McDonalds for soft serve.” Others posited that it was a reference to the stock’s moving average convergence divergence, or MACD, a technical indicator of its momentum.

One Redditor named Its4PM had a simpler theory: “Just look at how the M is drawn… Let me give you a clue, motherf—er. IT GOES UP AND DOWN,” the user wrote in a Thursday morning post.

The rally may have also gotten some fuel from former short-seller Andrew Left’s Citron Research, which urged GameStop to acquire Esports Entertainment Group, a gambling platform for professional video-gaming events. Esports Entertainment’s shares surged as much as 39 percent on the news.

“Instead of selling these people low margin hardware and video games, GME should become the software and more important the BETTING platform for their gamers to compete in and bet on E Sports,” Left — who said last month that he was threatened for betting against GameStop — wrote in a report.

Thursday’s rally put a fresh squeeze on short sellers, who have added nearly 2 million GameStop shares worth $181 million to their bets against the stock over the past week, according to data from S3 Partners.

Investors with short positions in the Texas-based company have now racked up nearly $11 billion in mark-to-market losses since the start of the year, S3’s data show.

“GME’s short side was not the primary driver of the sudden and sharp increase in its stock price,” S3 managing director Ihor Dusaniwsky said. “While there were some buy-to-covers brought about by large mark-to-market losses they were offset by new short sellers looking for a pull back from this volatile price move.”

Despite surging for the past two days, GameStop shares were still trading well below the peak of $483 they reached in late January as the Reddit-fueled market frenzy reached a fever pitch.

The unprecedented rally began as an online campaign against hedge funds that had bet against GameStop and other beaten-down companies and ended up attracting the attention of federal regulators and Congress.

Keith Gill, the retail trader known as “DeepF—ingValue” on Reddit who’s been credited with starting the GameStop surge, doubled down on his investment after testifying before the House Financial Services Committee last week.

GameStop’s explosion came after the Texas-based company said chief financial officer James Bell would leave at the end of March. He was reportedly pushed out by board member and investor Ryan Cohen, the Chewy.com co-founder who some GameStop fans see as key to improving the company’s fortunes.

After Cohen tweeted a photo of a McDonald’s ice cream cone with a frog emoji on Wednesday, some online traders took the cryptic post as a sign that he was executing some grand turnaround plan.

“The frog is the long-used symbol of transition and change, from tadpole to frog,” one Reddit poster speculated.