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Shares of GameStop rose again on Wednesday in pre-market trading, and continued the streak of wild stock fluctuations as several high-profile short sellers said they had withdrawn their positions.
Shares traded at approximately $ 375 per share at 9:24 am ET, up 154% in premarket trading.
The last higher step comes when some of GameStop’s high-profile short sellers, including Melvin Capital and Citron, announced that they were covering most or all of their positions.
Shares lost some of their pre-market gains after short sellers made their announcements, but stocks rebounded to new highs shortly before the market opened.
GameStop’s near-vertical rise over the past week has come as retailers, many of whom have documented their moves on the social networking site Reddit, have piled on buy and sell options. The rise in the stock price has helped create a reduction in stocks, where distributors of shorts and options are forced to buy shares of a rising stock to cover their positions, leading to a loop feedback that makes the shares even higher.
Shares seemed to gain momentum in expanded trading on Tuesday after Tesla CEO Elon Musk tweeted about the link to the Reddit board where much of the discussion has taken place.
The video game retailer, which had a market cap of less than $ 4 billion at the end of last week, was yesterday the most quoted market value by value, according to Deutsche Bank strategist Jim Reid.
GameStop’s rapid rise has allowed it to be compared to speculative trading during the tech bubble of the late 1990s and led many Wall Street veterans to warn investors about the potential for significant losses.
Hedge fund manager Michael Burry, who reported he had 1.7 million shares of the stock at the end of September, said in a now deleted tweet that the rise was “unnatural, unhealthy and dangerous.” Burry also told Bloomberg News that he did not have a current position either long or short on the shares.
William Galvin, Massachusetts’ top securities regulator, told Barron’s that trading on GameStop could be “systematically wrong.”
Bank of America on Wednesday raised its stock price target to just $ 10 per share, telling customers in a note that raising the stock price could help GameStop’s investment plans, but that it presented a risk for investors.
“While it’s hard to know how much high interest rates and retail ownership … could continue to put upward pressure on equities, we believe the fundamentals will once again take valuation into account,” the note said.
The Securities and Exchange Commission declined to comment to CNBC.
– CNBC’s Michael Bloom contributed to this story.