The WallStreetBets forum on the Reddit Inc. website on a laptop computer and the GameStop logo on a smartphone arranged in Hastings-On-Hudson, New York, U.S., on Friday, Jan. 29, 2021.
Tiffany Hagler-Geard | Bloomberg | Getty Images
GameStop shares were volatile in premarket trading on Monday as the Reddit-fueled frenetic trading extended into February.
Shares of the bricks-and-mortar video game retailer jumped as much as 18% to $384.89 in premarket trading, but were latter down about 2% and then began to recover to $323. The stock surged 1,625% in January.
The astronomical rally has inflicted a mark-to-market loss of almost $20 billion to hedge funds with short positions against the stock, according to data from S3 Partners. However, many short sellers are holding onto their bearish positions.
Robinhood and other trading apps continue to limit buying of GameStop stocks and options contracts, along with those of other heavily shorted names, following a week of hugely volatile trading due to a retail trading frenzy led by 5 million-strong Reddit thread “WallStreetBets.”
Limitations are also in place for AMC Entertainment, BlackBerry, Koss, Express, Nokia, Genius Brands International and Naked Brand Group.
Short selling is a strategy in which investors borrow shares of a stock at a certain price on expectations that the market value will fall below that level when it’s time to pay for the borrowed shares.
— CNBC’s Yun Li contributed to this report.
