Share of GameStop leveled up again Tuesday, rising more than 90% to a record high of $147.98.
The meteoric rise of the video game company has been fueled by enthusiasm for the shares by day traders and denizens of a Reddit group called Wall Street Bets. GameStop had been the most shorted publicly traded company, with many hedge funds betting that its share price would continue to decline. The unwinding of those bets has boosted the share price.
GameStop has rallied more than 600 percent in January. Within the last year, shares have been as low as $2.57.
Some are attributing the rise of GameStop shares to pandemic-induced boredom.
Bloomberg columnist Matthew Levine writes:
I have written a lot recently about my “boredom markets hypothesis,” the notion that stocks these days are driven not by rational calculations about their expected future cash flows but by the fact that people are bored at home due to the pandemic and have nothing better to do but trade stocks with their buddies on Reddit. Why not trade GameStop, literally a stock about games? And if you look at WallStreetBets, there are of course a lot of rocket emojis and Lord of the Rings memes and screenshots of large numbers in people’s trading accounts.
Some on Wall Street and in the financial media are calling for regulators to crack down on message boards popular with GameStop bulls.
Shares are indicated even higher in after-hours trading.