Thursday 10 June 2021 12:09 pm

Gamestop drops while Clover Health rises as rollercoaster ‘meme stocks’ continue

GameStop shares fell 7.6 per cent this morning while Clover Health Investments (CLOV.O) jumped 5.9 per cent earlier today after soaring about 86 per cent earlier this week as retail traders on reddit turn their attention to new stocks to push up. 

GameStop announced the head of Amazon’s Australian business, Matt Furlong, as its new CEO yesterday and said it may sell new shares after it reported quarterly results that were stronger than expectations.

Shares of the videogame retailer closed on Wednesday at around $302 (£214), near levels hit in January when a Reddit-driven frenzy pushed its stock up 1,600 per cent.

Clover Health, which had a short interest of 43.5 per cent of free float as of Tuesday, was up 5.9 per cent and hitting a record high of $28.85 (£20.46) during the session.

Over the last two weeks so-called “meme stocks” have received $1.27bn (£900m) of retail inflows, Vanda Research said on Wednesday. The figure matched their peak in January when the surge in Gamestop shares squeezed short sellers, raising the stock price further. 

Shares of AMC Entertainment were down 6 per cent, while prison operator Geo Group (GEO.N) – considered the latest “meme stock” – fell 8.5 per cent after surging almost 40 per cent on Wednesday.

The rally in heavily shorted U.S. stocks has drawn the attention of the U.S. Securities and Exchange Commission and Gamestop admitted on Wednesday that the SEC had requested documents and information related to an investigation into that trading.