GameStop’s stock price saw yet another sudden surge in late trading hours on Wednesday. After opening at $44.70 that morning, the price shot up from $52.41 at 3pm to $91.71 just before the market closed at 4pm.
That 75 percent increase in a single hour was followed shortly after by a peak price of nearly $200 in post-market trading Wednesday evening. As of this writing, the stock is currently selling at about $132 in highly volatile early market trading.
The sudden surge obviously brings to mind GameStop’s similarly quick stock price run-up in late January. Since peaking at over $400 during that extremely volatile week, though, GameStop’s stock price had settled to something resembling calm, closing between $40 and $60 every day since February 8.
The recent jump came approximately 24 hours after GameStop announced the sudden resignation of CFO Jim Bell, effective next month. Business Insider’s sources suggest Bell was forced out after the board lost faith in his ability to turn the troubled retailer around, and GameStop’s announcement of that move mentioned the company is looking for a replacement “to help accelerate GameStop’s transformation.”
The movement also comes days after reports that Keith “DeepFuckingValue” Gill—who recently testified to a House committee on his massive gains via early GameStop stock purchases—had doubled his position in the stock by buying 50,000 more shares sometime in February. And early in the afternoon Wednesday, activist investor and GameStop board member Ryan Cohen made one of his rare cryptic tweets featuring a frog emoji and a picture of a soft-serve ice cream cone.
That all might seem like thin reason for a stock’s value to more than triple overnight. But amid the memes of Reddit’s now-famous WallStreetBets subreddit are a number of posts reading the tea leaves to predict a gamma squeeze. That’s a complicated process where market makers are forced to buy stock to hedge their bets on call options they previously offered, sending the stock price shooting quickly higher.
Others on the subreddit are airing their grievances against mainstream financial reporters or encouraging their fellow bettors to continue holding the stock as its price goes up.
The last time GameStop stock showed this much volatility, popular commission-free trading platform Robinhood was forced to temporarily limit purchases of GameStop and a few other stocks due to clearinghouse collateral requirements. Robinhood CEO Vlad Tenev recently testified that the company has raised an additional $3.4 billion since then to prevent the need for such restrictions going forward.
Meanwhile, the Depository Trust and Clearing Corporation, a major stock sales processor, has come out in favor of reducing the time it takes to settle a stock trade from two days to one. That would help cut brokerage costs and liquidity requirements during times of volatility, the company said.