The Gamestop madness is back: shares soar above 70% shortly after the stock market opens

After two frantic weeks and a certain recent calm, Gamestop shares began the session this Monday, June 3rd, on a strong rise, having reached “fly†more than 73 %. By mid-afternoon, they were already quoting more modest gains, around 33%. According to Reuterswhich cites data from LSEG, the equivalent of 1.9 billion dollars (around 1.8 billion euros at current exchange rates) in Gamestop shares were traded in the first 12 minutes of the northern session -American.

These were gains widely expected by the markets. According to Bloombergthis Monday, in the pre-market (secondary market in which securities are traded outside the stock exchange’s regular opening hours), Gamestop’s shares rose by more than 100%.

If Gamestop had fully carried this “peak†in the price to this Monday’s session, it could have more than doubled the market capitalization with which it ended Friday’s session , exceeding 7 billion dollars (6.5 billion euros). Having said that, what is motivating all of this?

The cause of the rises

Gamestop has returned to the spotlight in recent weeks. And this is three years after the moment when Reddit managed to beat (for a moment) the speculator funds that were betting on a drop in share prices of companies with weak prospects, the so-called meme stocks – the case of Gamestop, a North American games retailer, with hundreds of physical stores, at a time when digital is king.

We have reached the spring of 2024 and Reddit users (a network where people from all over the world debate the most varied topics) are back in charge motivated by the return to social networks of “Roaring Kitty†(civil name Keith Gill, the great instigator of the stock market madness at the beginning of 2021). On May 13th, inspired by this return to life, many of those who participated with their own money in the onslaught three years ago did so again, causing rises of more than 100% in Gamestop’s share price and the suspension of securities trading on that day three times.

On the 15th, purchase orders for meme stocksincluding those from Gamestop, jthey were not as fervent, which caused strong corrections in prices. Either way, they managed to cause significant damage: 2 billion euros in losses, in the first two days alone, for hedge funds who “bet†on the devaluation of these securities, according to S3 Partners.

This Sunday, the euphoria would be revived after Gill posted on Reddit, reactivating his long-dormant account, a screenshot in which he reported the purchase of 5 million Gamestop shares at 23.14 dollars (21.33 euros) and the existence of 120 thousand share purchase options, at 20 dollars (18.4 euros ) each, with a deadline of June 21st of this year, valued at a total of 65.7 million dollars (60.6 million euros). A total of 116 million dollars (107 million euros) apparently invested in Gamestop, calcula a Reuters. Which will have triggered this Monday’s valuations.

Text updated at 3:38 pm with details regarding the start of this Monday’s stock market session


Francesco Giganti

Journalist, social media, blogger and pop culture obsessive in newshubpro

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