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Shares in GameStop rose again on Wednesday, continuing the streak of wild swings for the stock as several high-profile short sellers said they had withdrawn from their positions.
The stock traded about $ 308 a share shortly after the market opened, more than 100% since Tuesday’s close, giving the company a market capitalization of $ 21 billion. The stock traded up to $ 380 per share in the pre-trade.
The latest step higher comes when some of GameStop’s striking short sellers, including Melvin Capital and Citron, announced they were covering most or all of their positions.
The stock lost some of its gains in the forex market after the short sellers made their announcements, but shortly before the market opened, the stock returned to new highs.
GameStop’s near-vertical boom came last week when retailers, many of whom documented their moves on social media site Reddit, piled up stock and buy options. The rising stock price has contributed to creating a stock tense, where shorts and option brokers are forced to buy shares of a rising stock to cover their positions, leading to a feedback loop that drives the stock even higher.
The shares apparently got a boost in expanded trading on Tuesday after Tesla CEO Elon Musk tweeted the link to the Reddit board where many of the discussions took place.
The video game retailer, which had a market capitalization of less than $ 4 billion at the end of last week, was the value that traded the most on the market yesterday, according to Deutsche Bank strategist Jim Reid.
GameStop’s rapid rise showed comparisons with speculative trading during the technology bubble of the late 1990s, prompting many Wall Street veterans to warn investors about the possibility of significant losses.
Hedge fund manager Michael Burry, who owned 1.7 million shares at the end of September, said in a tweet that has now been removed that the increase is ‘unnatural, insane and dangerous’. Burry also told Bloomberg News that he does not have a current long or short position in the stock.
William Galvin, the largest security regulator in Massachusetts, told Barron’s that trading in GameStop could be ‘systematically wrong’.
Bank of America on Wednesday raised its share price target to just $ 10 a share and in a note to customers said the increased share price could help GameStop’s turnaround plans but pose a risk to investors.
“While it is difficult to know how many very short-term interest rates and retail ownership can continue to put upward pressure on equities, we think the fundamental factors will again be of value,” the note reads.
The Securities and Exchange Commission declined to comment on CNBC.
– Michael Bloom from CNBC contributed to this story.