GameStop shares jump 11% as Reddit trading mania calms

FILE PHOTO: GameStop logo is seen in front of displayed Reddit logo in this illustration taken on Febr. 2, 2021. REUTERS/Dado Ruvic/Illustration/File Photo/File Photo

(Reuters) – Shares of videogame retailer GameStop Corp jumped 11% in early deals on Monday even as recent social media-hyped trading hysteria in other stocks appeared to be fizzling out.

GameStop and other companies including cinema operator AMC and headphone maker Koss have seen wild gyrations in their stocks over the past two weeks as amateur investors on forums such as Reddit’s WallStreetBets acted in concert to bid up stocks that some U.S. funds had bet against.

The rally, which catapulted GameStop shares to as high as $483 from around $20 before they fell back to about $64, has drawn the attention of regulators, although Treasury Secretary Janet Yellen said on Sunday it was too soon to say whether new policies or regulations were needed to deal with the volatility.

In pre-market trading on Monday, GameStop shares were up 10.8% following a 20% jump on Friday. AMC shares, on the other hand, rose just 1.3% after falling about 4% on Friday, while Koss dropped 1.9%.

Trading volumes in GameStop also appeared to be settling following a record 24.71 million shares traded on Jan. 25 at the beginning of the slugfest between small investors and Wall Street hedge funds. About 7.6 million shares were traded on average every day last week, although that was still well above the stock’s 50-day moving average volume of roughly 4.4 million.

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