GameStop and other so-called meme stocks surged on Thursday, as investors piled into the shares after a tumble in the previous session.
Shares in video-game retailer GameStop closed up 52.7% at $183.75 with brisk trading volume after rising as high as $187.50 late in the session.
The company’s shares remained down 8.2% for the week so far following losses after a lackluster earnings report late Tuesday during which the company disclosed it was evaluating the possibility of a share sale. They are up 875% year-to-date, though still far from their record high of $483 reached in late January.
The company has benefited from a push by retail investors, often on online forums such as Reddit’s popular WallStreetBets, to drive up prices of stocks they believe undervalued.
Investors have also been eyeing efforts by billionaire investor and Chewy Inc co-founder Ryan Cohen, who is on GameStop’s board, to transform the retailer into an e-commerce firm that can take on big-box store rivals such as Target Corp and Walmart Inc.
GameStop, which added three new directors including Cohen to its board in January as part of a settlement, said in its quarterly filing on Tuesday it expects eight incumbent board members to retire at its 2021 annual meeting in June. The company said it has not yet determined who it would nominate to replace departing board members.
CFRA analyst Camilla Yanushevsky said some investors believe the plan for a board overhaul is a promising sign for GameStop’s efforts to expand e-commerce.
“If Ryan Cohen can fill the board with his allies, people think it can lead to a transformation in GameStop. That’s what the bull case is,” she said.
Meanwhile shares in other meme stocks such as headphone maker Koss Corp also surged. Koss shares closed up 57.1% at $25.80 with trading volume around 4.7 times the 10-day moving average. The stock had fallen almost 22% on Wednesday.
Cinema operator AMC Entertainment Holdings Inc closed up 21.3% at $10.94 after falling 36% in the last four sessions.
Reporting By Sinéad Carew; Editing by Alden Bentley and David Gregorio; Reuters