Back in focus: The meme stock trade.
By the numbers: GameStop finished up 19%, after a wild day that saw shares spike as much as 80%.
Why it matters: The moves are muted compared to the eye-popping gains that shocked the world last month.
- But the surge means online traders banding together on social media boards could be a lasting feature of the U.S. stock market.
What’s going on, technical answer: The steep gains that started Wednesday night were “mostly long buying with short covering sprinkled in to help grease the skids up,” says short-selling expert Ihor Dusaniwsky.
What’s going on, more fun theory: A CFO resignation and a tweet featuring an ice cream cone are riling people up.
- GameStop says its chief financial officer is resigning — an executive who was once respected (at least by traditional investors) for helping shape up the company’s finances.
- The C-Suite swap is now seen as an opportunity for change, a theory fueled by a picture of a McDonald’s ice cream cone tweeted out by board member Ryan Cohen — a major shareholder who gained a board seat (and thus more influence) earlier this year.
- Much like McDonald’s is known for fixing its broken ice cream machines, the thinking is Cohen was signaling that he would “fix” GameStop.
What they’re saying: “This doesn’t make any sense,” Anthony Chukumba, a longtime Wall Street analyst, told CNBC Thursday of GameStop’s wild rally.
- “And you know what, call me a boomer. I’m totally fine with that.”
- He said the stock is worth $10, at the most.
What to watch: All eyes will be on GameStop if and when the company takes advantage of the hype to grow its struggling business.
- It wouldn’t be the only Reddit stock to do so: AMC took advantage of its stock surge by swapping roughly $700 million worth of debt into equity.
- It’s “curious” that GameStop hasn’t issued shares at this soaring price — a move companies do to raise money, Telsey Advisory Group’s Joe Feldman tells Axios.