MW UPDATE: GameStop, AMC stocks fall as oversight momentum builds, Reddit poster to testify
By Steve Goldstein and Wallace Witkowski
GameStop on track for first losing week in the past four
GameStop Corp. shares were under pressure Thursday for the third trading day this week as volatile trading of heavily shorted stocks comes under more federal scrutiny.
GameStop $(GME)$ shares, which had fallen as much as 33% in morning trading, were last down 26% at $68.74 on volume of more than 35 million shares, having touched a record of $483 on Jan. 28. Shares of the videogame retailer are down more than 75% for the week to date, and are on track to snap a three-week winning streak that was topped by a record 400% gain last week .
Late Wednesday, Rep. Maxine Waters, the chairwoman of the House Financial Services Committee, told Cheddar TV , will testify later this month.
Also, Treasury Secretary Janet Yellen is leading a meeting of federal regulators Thursday to discuss financial market volatility in wake of the frenzy .
Waters, who said the hearing will be "educational," said she also hopes a hedge-fund representative will attend. The Feb. 18 hearing is called "Game Stopped? Who Wins and Loses When Short Sellers, Social Media, and Retail Investors Collide."
Read:The SEC could cripple Robinhood's business model by enforcing existing rules, experts say
Tenev and Gill have been the two individuals most associated with the rise and subsequent fall in the stock of GameStop. The bandanna-wearing Gill, who goes by the username "DeepF--ingValue" on Reddit and goes by "Roaring Kitty" on YouTube, has been building a position in GameStop since the summer of 2019. See this WSJ profile of Gill .
Meanwhile, over on the Reddit WallStreetBets thread , which kicked off the buy-and-hold-GameStop-at-all-costs trend, the most popular posts remained those exhorting the faithful to hold on to GameStop shares in the face of recent losses.
The rally in GameStop, which was fueled by a squeeze of hedge funds betting against the company, started to subside after Robinhood, as well as other brokerages, limited the ability for investors to buy stocks and options in the company. The brokerage has raised billions from its backers to meet increased margin requirements.
Several other heavily shorted stocks got swept up in the frenzy, most notably AMC Entertainment Holdings Inc. $(AMC)$ Shares of AMC fell as much as 16% Thursday and were last down 13% at $7.78. AMC's stock price is down 41% so far on the week, and like GameStop, is on track to snap a multiweek string of gains having notched a record weekly gain of 278% last week.
Shares of other heavily shorted names trading significantly lower Thursday include Lannett Co. $(LCI)$, down 16%; and National Beverage Corp. (FIZZ), down 8%;
On the flip side, heavily shorted stocks trading higher Thursday included Macerich Co. $(MAC)$, Children's Place Inc. $(PLCE)$, and Fossil Group Inc. $(FOSL)$
-Steve Goldstein; 415-439-6400; AskNewswires@dowjones.com
$(END)$ Dow Jones Newswires
February 04, 2021 13:16 ET (18:16 GMT)
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