Between December 28th, 2020 and January 27th, GameStop stock increased by 1,555%. This week, it hit a high of $380 per share and created a new billionaire. Thousands of at-home traders, many perched on Reddit boards, are pouring into a slew of heavily shorted and "fundamentally hated" stocks Wednesday in an effort to squeeze money out of the short bets placed by Wall Street’s elite; here are the stocks–in addition to GameStop and AMC–nabbing mind-blowing gains as regulators start to sound an alarm on the frenzy among retail traders.
According to regulatory filings, Ryan Cohen—the founder and former CEO of Chewy, a booming e-commerce firm focused on pet supplies–spent about $76 million buying up more than 9 million GameStop shares at the tail-end of last year as he mounted an effort to restructure the Grapevine, Texas-based firm.
It’s unlikely that Cohen, or anyone for that matter, could have predicted what would play out over the next couple of months. GameStop shares are up more than 800% since his declaration, and the value of Cohen's stake has skyrocketed to about $825 million. Tack that onto the proceeds Cohen received from PetSmart's $3.4 billion acquisition of Chewy in 2017, and Forbes estimates the 35-year-old is worth about $1 billion. A spokesperson for Cohen said he was not available for an interview at press time.
Like GameStop and AMC, many of the stocks fueling the Reddit trade are among the most shorted stocks in the market, including Bed Bath & Beyond, Ligand Pharma and National Beverage Corp, which are up 28%, 18% and 36% Wednesday afternoon while the broader market struggles to stay afloat. Out of the 10 most shorted stocks (as a percentage of shares available to trade), eight of them were posting double-digit percentage gains Wednesday, including FuboTV, Tanger Factory Outlets and Tootsie Roll Industries.
In this video, Forbes breaks down how this meteoric rise has turned into an economic and ideological battle between Wall Street hedge fund investors and Main Street Redditors.
Read more on Forbes: https://www.forbes.com/sites/jonathanponciano/2021/01/27/not-just-gamestop-here-are-the-meme-stocks-wallstreetbets-traders-are-pumping-up-during-this-extremely-erratic-reddit-rally/?sh=71ec8cb65bb7
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