GameStop Corp. shares surged to a record in 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 85% to $120 a share, extending their ascent so far in 2021 to more than 500%. The rapid gains prompted the New York Stock Exchange briefly to stop trading in the stock four minutes into Monday’s session.
That followed a hectic premarket session in which GameStop’s stock price soared and more than 10 million shares traded hands, far above the average.
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.
