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Shares of GameStop climbed more than 70% in premarket trade on Thursday as heavily-shorted stocks favored by Reddit traders look set for a resurgence.
Investors piled into the bricks-and-mortar video game retailer on Wednesday following the reported ousting of Chief Financial Officer Jim Bell, sending the stock soaring 103.9% before trading was halted.
The company announced Tuesday that Bell will resign on March 26, with reports suggesting that Ryan Cohen – GameStop investor and co-founder of online pet food retailer Chewy — and the board forced the move in order to accelerate its transition online.
Jefferies analyst Stephanie Wissink said in a note that the change may have come from GameStop’s discussions with an activist investor that occurred before the late-January price surge.
“We acknowledge that leadership changes often follow activist settlements and Mr. Bell’s exit was mutual, non-immediate, and suggests no disagreements with company/board,” Wissink said in a note.
GameStop was at the center of a period of market mayhem in late January as retail traders led by multi-million-member Reddit thread WallStreetBets sent its share price skyrocketing, causing a short-squeeze on a number of Wall Street hedge funds with bets on its decline.
However, some analysts have suggested that there was also some institutional involvement in the ballooning share price.
Another stock caught up in the retail frenzy, AMC Entertainment, was up 16% in premarket trade on Thursday, having climbed 18% during the previous session. The cinema chain has been bolstered by New York Governor Andrew Cuomo announcing that movie theaters in the city could open with limited capacity next month.
Meanwhile, headphone manufacturer and fellow Reddit favorite Koss Corp jumped more than 100% in the early hours of Thursday.
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