‘REDDIT RALLY’ STOCKS BOUNCE BACK, THEN SAG AGAIN

GameStop and other social media darlings rebounded in calmer trading on Wednesday from their sharp sell-off in the prior session as investors turned their focus to the possibility of tighter US trading regulations, Chuck Mikolajczak reported for Reuters.

However, the so-called “Reddit rally” cooled again in after hours trade, as GameStop and AMC Entertainment, the main targets hyped on investment forums, fell.

Mass buying over the past two weeks by amateur traders following posts on social media fueled a fierce rally in companies that big hedge funds had bet against, including videogame retailer GameStop and cinema operator AMC.

GameStop had soared as high as $483 last week, fueled by posts on the Reddit forum WallStreetBets, then dove, and, on Tuesday fell briefly below $90.

On Wednesday GameStop shares closed up 2.68% at around $92.41.

They seesawed all day but within a range, while shares of AMC rose 14.71% a day after dropping 41%.

After the closing bell, GameStop was off 2.61% while AMC dipped 2.23%.

Some professional investors bemoaned the volatility and warned that retail investors who piled in could ultimately face big losses.

“The fundamentals are well known and obviously the stock prices have detached from the fundamentals,” said Stephen Massocca, senior vice president at Wedbush Securities.

“I have told people just stay away, it is dynamite and who knows when, how or where it blows up.”

Many Reddit users on WallStreetBets exhorted one another to stay in the stocks despite the big swings.

WEEKLY FEATURE : COLORSTEEL'S PRESIDENT BREAKS BARRIERS