Shares of GameStop Corp (GME.N) fell 7% and Clover Health Investments Corp (CLOV.O) jumped 6.4% in early deals on Thursday, setting the stage for another roller coaster session for stocks favored by small-time investors on social media platforms.
Videogame retailer GameStop on Wednesday named the head of Amazon.com Inc’s (AMZN.O) Australian business as its chief executive officer and said it may sell new shares after it reported quarterly results that were stronger than analysts expected. read more
GameStop’s shares were trading at around $281 premarket after closing Wednesday at $302.56, near levels hit in January when a Reddit-driven frenzy sent its stock up 1,600%. read more
“This latest chapter of the meme stock mania seems very much to be the typical pump and dump trade,” said Edward Moya, a senior market analyst at OANDA, identifying e-commerce company ContextLogic Inc (WISH.O) and Clean Energy Fuels Corp (CLNE.O) as the new targets of retail traders.
Shares of the two companies were up 5.8% and 4.2%, respectively.
“This frenzy will likely remain a viable option for some traders if the S&P 500 index provides lackluster moves and continues to hover around record highs,” Moya added.
Shares of cinema operator AMC Entertainment Holdings Inc (AMC.N) were down 4.1%, while prison operator Geo Group Inc (GEO.N), the latest “meme stock”, slumped 8.8%, after surging more than 38% on Wednesday.
The rally in heavily shorted U.S. stocks, which has also lifted shares of Medicare-backed insurance seller Clover and AMC, has drawn the attention of the U.S. Securities and Exchange Commission (SEC).
GameStop said on Wednesday the SEC had requested documents and information related to an investigation into that trading.
Clover, which had a short interest of 43.5% of free float as of Tuesday, was up 6.4% at around $18.01 before the bell. It ended Wednesday at $16.92 after hitting a record high of $28.85 during the session.
In the past two weeks, the so-called “meme stocks” have received $1.27 billion of retail inflows, Vanda Research said on Wednesday. That matched their peak in January, when the surge in GameStop shares squeezed short sellers and further boosted the stock price.
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