REUTERS: Shares of GameStop soared 16.3per cent on Tuesday after hitting their highest level since late March, and other so-called "meme" stocks also rallied as investors shifted back into the retail favorites that had notched big gains earlier in the year.
The video game retailer’s shares finished at US$209.43, marking their first close above US$200 since March 19. Shares of AMC Entertainment Holdings ended up about 20per cent while Koss Corp gained 22.9per cent.
"Once it goes over US$200 the buzz starts," said Dennis Dick, head of markets structure and proprietary trader at Bright Trading LLC. You can “100per cent peg it to social media."
GameStop’s shares and those of other stocks popular on forums such as Reddit’s WallStreetBets have climbed in recent weeks, a move that has come amid a broad sell-off in Bitcoin and other cryptocurrencies, another investment popular among individual investors.
GameStop closed 46.5per cent above its lowest close so far for May, while Bitcoin is down about 35per cent so far this month and rival cryptocurrency ether is about 42per cent below its record, reached on May 12 in a sell-off that has come amid increasing scrutiny from regulators in the United States and China.
Denizens of WallStreetBets and some Twitter users also speculated that the recent moves in GameStop and AMC may be forcing bearish investors to unwind their bets, an event known as a short squeeze.
Roughly 26per cent of GameStop's float or 14.76 million shares were on loan as of May 24, according to Astec Analytics. More than 14 million shares in the company changed hands on Tuesday, marking its busiest trading day since mid-April.
Some 129 million shares of AMC Entertainment, or 28.8per cent of its float, were on loan on May 24, Astec data showed.
A short squeeze helped send shares of GameStop on a 1600per cent run in January, though the stock pared much of those gains the following month.
Users on Twitter, meanwhile, exhorted one another to hold or buy more shares of AMC, many under the hashtag #notapenny, which notched more than 17,000 posts by 4pm ET.
(Reporting by Sinéad Carew, Writing by Ira Iosebashvili; Editing by Dan Grebler)