GameStop surges past $10 billion as Elon Musk piles on
GameStop Corp.'s stock price nearly doubled in Tuesday trading, taking its market value over $10 billion as its shares soared 685% this year.
The stock’s gain vaulted its market value past more than 10% of S&P 500 stocks including American Airlines Group Inc., Under Armour Inc. and Invesco Ltd. It started the year with a market capitalization of $1.2 billion.
Earlier this month, traders piled into the stock after activist investor and Chewy Inc. co-founder Ryan Cohen joined its board.
The rally has also been fueled in part by Reddit-charged day traders who used the website’s WallStreetBets forum to pump up shares and fight back against the huge level of short interest, which has held steady at about 140% of the float, according to data compiled by S3 Partners.
Short bets by Gabe Plotkin’s Melvin Capital and Andrew Left’s Citron Research have faced a reckoning in the battle with GameStop’s retail fans.
Better-known names piled into the stock today with venture capitalist Chamath Palihapitiya pushing the gains higher during trading hours after tweeting about buying calls. Elon Musk later tweeted a link to a Reddit thread about the company. (The Tesla chief executive also caused shares in Etsy to spike when he tweeted about buying a knit hat for his dog there.)
GameStop surged as much as 68% in extended hours, climbing past $240 a share at one point after soaring 93% during the regular trading day.
Hedge fund titans Ken Griffin and Steve Cohen boosted Melvin Capital, according to a statement Monday, injecting a total of $2.75 billion into the firm after it lost about 30% this year. The capital infusion came after Melvin Capital, which started the year with about $12.5 billion in assets, saw short bets, including GameStop, go awry, people familiar with the firm said.