GameStop fizzles as stock falls below $50 a share
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GameStop (GME) shares continue to decline as the frenzy over the heavily shorted stock dries up. Shares of the video game retailer are down more than 18% on Tuesday.
Despite recent losses, the stock is up more than 150% year-to-date. That’s still a far cry from when shares soared around 1600% in January to an intraday high of $483, briefly positioning the company as the largest of the Russell 2000 (^RUT) index.
Shares began to tumble from their highs when brokerage platform Robinhood imposed trading restrictions on the stock during the last week in January. The volatile downward trend continued over days even while those limits eased as some investors cashed out or cut their losses. Trading volume has been on the decline since its peak on Jan. 22.
Other heavily shorted stocks have followed similar patterns, including AMC Entertainment (AMC), Koss Corporation (KOSS) and Express (EXPR). All of those stocks were lower during Tuesday’s session.
Last week the Securities and Exchange Commission indicated it would comb through social media posts in search of any market manipulation on GameStop over the last month.
Lawmakers are expected to hold a hearing on the stock’s short squeeze frenzy on Feb. 18. Robinhood CEO Vlad Tenev and some of Wall Street’s hedge funds are expected to be called to testify.
Ines covers the U.S. stock market. Follow her on Twitter at @ines_ferre