As retail investors come to the rescue, GameStop drops 10% after falling profits

As retail investors come to the rescue, GameStop drops 10% after falling profits

A man watches Gamestop on 6th Avenue on February 25, 2021 in New York City.

John Smith | Corbis News | Getty Images

GameStop made a surprising intraday comeback after its sell-off after earnings on Thursday, as retail investors noticed a lack of clarity on recovery plans and crammed into the star of memes.

Shares of the video game retailer traded 1% higher last around $ 200 in intense trading, after falling 10.5% to its session low of $ 178.

The initial drop came as GameStop did not provide details on the outlook for the next few quarters and its e-commerce transformation, which disappointed Wall Street analysts. But signs have emerged that small investors in Reddit’s chat room have decided to buy the name down, pushing the stock higher.

GME was the most popular ticker mention on Reddit’s WallStreetBets forum, according to alternative research provider Quiver Quantitative, which outperforms previous show stars Clover Health and SPY (the exchange-traded fund that tracks the S&P 500).

According to the broker’s website, Gamestop was also the most active trade on Fidelity at 2 p.m. ET, passing nearly three times the number of sell orders. Other memes stocks, including AMC Entertainment, Vinco Ventures, and Support.com, were also among the best buys on the platform.

By the time of the afternoon trade, over 6 million GameStop shares have changed hands, nearly doubling its 30-day average trading volume, according to FactSet.

While GameStop fell short of expectations, the retailer posted a slight loss in the second quarter and higher sales.

Did you like this article?
For exclusive stock picks, investment ideas and global live broadcasts from CNBC
Sign up for CNBC Pro
Start your free trial now

.

LEAVE A REPLY

Please enter your comment!
Please enter your name here