GameStop shares jump over 100pc in sign of renewed trading frenzy

GameStop was at the centre of the recent retail investor movement

Credit: Reuters

Trading in GameStop was abruptly halted on Wednesday after shares in the US retailer suddenly doubled, signalling a possible return of the retail investing frenzy that rocked markets in January.

GameStop shares climbed by 104pc until trading was halted minutes before Wall Street markets closed for the day. Most of the surge occurred in the final hour of trading. Shares jumped another 31pc in after-hours trading.

The increase, which appeared to be linked to reports that activist investors had been responsible for the recently-announced departure of GameStop’s chief financial officer, raised the prospect that the trading frenzy surrounding the stock could return.

Last month, GameStop’s shares climbed to $483 from less than $20 at the start of the year, as online investors backed the struggling video game retailer in what was portrayed as a David and Goliath battle with professional short sellers.

The boom quickly subsided, with GameStop’s shares subsequently plummeting in early February and investors who had bought at its peak losing heavily. The episode led to a Congressional hearing last week and calls for markets to be overhauled as well as more scrutiny of smartphone trading apps.

Wednesday night’s surge appeared to be linked to reports that Ryan Cohen, an activist investor on GameStop’s board, had forced the departure of chief financial officer Jim Bell as part of a shake-up of the retailer. Mr Bell’s exit had been announced on Tuesday.

It came as the Dow Jones hit a new record after Federal Reserve chairman Jerome Powell indicated that rock-bottom interest rates would continue. The Dow rose 1.4pc to close at 31,961.86.

Reddit, the home of the WallStreetBets community that had led the GameStop movement, went offline amid the surge. The company said it was investigating the issue.