GameStop tumbles, Clover Health rises in ‘meme stock’ rollercoaster

FILE PHOTO: A person walks past a GameStop in the Manhattan neighborhood of New York City, New York, the United States, Jan. 29, 2021. REUTERS / Carlo Allegri / File Photo

(Reuters) – GameStop shares fell 7.6% on Thursday and Clover Health Investments rose 5.9% in early deals, setting the stage for another roller coaster session for stocks shared by retail investors on social media -Platforms are preferred.

Video game retailer GameStop named the head of Amazon’s Australian business as CEO on Wednesday, saying it could sell new stocks after announcing quarterly results that were better than expectations.

The shares traded around $ 279 ahead of market price after closing at $ 302.56 on Wednesday, near the level reached in January when the Reddit-fueled frenzy rose their shares 1,600% .

The rally of heavily short US stocks, which also boosted stocks of Medicare-backed insurance seller Clover Health and cinema operator AMC Entertainment, has caught the attention of the US Securities and Exchange Commission.

GameStop announced on Wednesday that the SEC has requested documents and information related to an investigation into this trade.

Clover Health, which had a short stake of 43.5% of the free float on Tuesday, rose 5.9% to around $ 17.92 before the bell. It ended at $ 16.92 on Wednesday after hitting a record high of $ 28.85 during the session.

In the past two weeks, so-called “meme stocks” have received $ 1.27 billion in retail inflows, Vanda Research said on Wednesday. That matched its peak in January when the surge in GameStop shares pushed short sellers and continued to fuel the share price.

AMC Entertainment’s shares were down 6.0%, while prison operator Geo Group – the newest “meme stock” – slumped 8.5% after rising 38% on Wednesday.

Reporting by Sagarika Jaisinghani in Bengaluru; Editing by Sriraj Kalluvila

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