Volatility has once again taken over GameStop shares.
Shares closed around 18.5% higher on Thursday after a tough session in which trading was halted several times due to strong movements. GameStop rose more than 100% on Wednesday after the company announced that its chief financial officer would resign.
Jim Cramer, host of CNBC’s “Mad Money,” said there may be only one way to justify the price of GameStop shares:
“One of the things … we saw Square do – it initially looked ridiculous, but it was okay; PayPal, the same thing – is that you become an encryption distributor. Last night, on the incredibly good Nvidia call, as a side note, they talked about March. [They’re] will have some real cards just for cryptography. It really won’t be important to Nvidia, but it could be important to a site like GameStop. If GameStop became an introduction to 5,000 store cryptography, do it to sell stocks worth $ 1 billion … and buy cryptography with it, and then make it an international gaming site where you earn bitcoin , I think you can justify the share price. I couldn’t come up with anything else, but that works. And it doesn’t have to be bitcoin. We can make it cryptographic. But turn it into a cryptographic information palace and you have games all over the world, no latency, you suddenly play in them [GameStop investor and Chewy co-founder] Ryan Cohen: Then you can start believing it. Well, CFOs don’t usually have bitcoins on the balance sheet. May be [resigning GameStop CFO] Jim Bell, I didn’t want that. Ryan Cohen is a great thinker. I have a feeling this is the way to increase this stock. I can’t get there any other way. “
Alma Angotti, a former lawyer for the Securities and Exchange Commission, predicted more interest from regulators:
“It’s important to remember that the securities regime is a disclosure regime and that people can make speculative bets on stocks and people can lose a lot of money. And maybe in the minds of certain people, that ice cream tweet was related to the financial director’s resignation tweet and they believe the company will be resolved and taken to the digital world quite successfully. It’s hard to say. But … I think both Congress and the SEC will study this balance between orderly markets and allow people to invest what they want to invest for the reasons they want to invest, even if it doesn’t make sense to us. “
Jon Najarian, co-founder of MarketRebellion.com and a CNBC contributor, tracked the activity of upload options on three Reddit-powered names:
“This is the volatility of steroids. And at the end of last week, this is the regular expiration of February. Three actions highlighted us both for the increase in Reddit posts and for [a] increased purchase of options, which were GameStop, AMC and Blackberry. So when we saw it, it was incorporated late last week … and then it faded, and it’s probably because GameStop bounced around a bit on Monday and on Tuesday it dropped to about 55,000 contracts in terms of on the call. This is pretty low. [On Wednesday], appears up to 270,000 calls. Thus, in other words, it multiplies by five [Wednesday]. Jumpers similar to AMC that surpassed one million call contracts since the low of about 155,000 last Friday and then also to Blackberry. And all three saw excessive movements. In the case of GameStop in particular, … it was amazing. [On Thursday], they bought $ 200 calls and exchanged up to $ 46 for a $ 200 call to about $ 12 just before we went on the air. So there’s a lot of fluff and a lot, I’m not trying to denigrate them, but a lot of amateur trading that haunts those until just one trading day, because obviously these options expire tomorrow, February expires tomorrow on strike of $ 200. Just crazy. But this is what happens. You get a lot of people out of it: if they get it right … they can make a lot of money, and if they don’t move fast, they have less and less time to get out. “
Michael Darda, chief economist and market strategist at MKM Partners, preached caution:
“I think we’re all a little confused. Talking to family and friends, they ask me a lot of questions about stocks that focus on these Reddit forums and also on cryptocurrencies. So all I’m telling retail investors to be friends and family, just be careful Specify if you want to speculate, but it should be a very small portion of your wallet and don’t expect any of this to be a one-way bet, so caution is sure to be needed here “.
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