GameStop Corp. shares surged ahead of the opening bell Monday, in the latest sign that frenetic trading by individual investors is leading to outsize stock-market moves.
Class-A shares of the Texas-based games retailer popped 54% to around $100 a share in hectic premarket trading, suggesting they may extend their steep ascent when the market opens. More than two millions shares traded hands premarket, far above the average.
By the close of Friday—when trading in GameStop’s shares was briefly halted due to volatility—the stock had more than tripled in 2021, exceeding its previous record high from 2007.
The rally has been fueled by individual investors, encouraging each other on social media to pile into GameStop shares and options. The buying pressure has led money managers to switch out of substantial bets that the stock would fall, analysts said.
This resulted in a short squeeze, in which rising prices prompt investors to buy back shares they had sold short to cut their losses, pushing the stock higher still.
