Behind GameStop's latest stock surge

  • Written by Axios
  • Published in Politics
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Back in focus: The meme stock trade.

By the numbers: GameStop finished up 19%, after a wild day that saw shares spike as much as 80%.

Why it matters: The moves are muted compared to the eye-popping gains that shocked the world last month.

  • But the surge means online traders banding together on social media boards could be a lasting feature of the U.S. stock market.

What's going on, technical answer: The steep gains that started Wednesday night were "mostly long buying with short covering sprinkled in to help grease the skids up," says short-selling expert Ihor Dusaniwsky.

What's going on, more fun theory: A CFO resignation and a tweet featuring an ice cream cone are riling people up.

  • GameStop says its chief financial officer is resigning — an executive who was once respected (at least by traditional investors) for helping shape up the company's finances.
  • The C-Suite swap is now seen as an opportunity for change, a theory fueled by a picture of a McDonald's ice cream cone tweeted out by board member Ryan Cohen — a major shareholder who gained a board seat (and thus more influence) earlier this year.
  • Much like McDonald's is known for fixing its broken ice cream machines, the thinking is Cohen was signaling that he would "fix" GameStop.

What they're saying: "This doesn't make any sense," Anthony Chukumba, a longtime Wall Street analyst, told CNBC Thursday of GameStop's wild rally....

  • "And you know what, call me a boomer. I'm totally fine with that."
  • He said

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