U.S. stock market indices finished the day mixed on Monday, as the first full week of trading under President Joe Biden begins.
In addition to the predictable beginning of earnings season, the week also got off to an interesting start as a group of stocks pumped on an investing community on Reddit soared. The Dow Jones Industrial Average lost 36 points, or 0.12%, to finish at 30,960.
GME stock defies gravity. Shares of video game retailer GameStop ( GME), a staple of mall retail in an industry where video games are increasingly bought virtually, surged 18% on Monday, continuing a hot streak that’s seen the stock roar from lows of $61.13 a share to intraday highs of $159.18 on Monday.
The stock is heavily shorted, but a community of individual investors on the social media site Reddit appear to have sparked a legendary run, catalyzed by their collective buying of GME shares as they seek to drive shares higher and higher, forcing shorts to “cover” their position by buying back the stock, creating more demand.
The strategy, although not at all based on the more fundamental, longer-term analysis that made investors like Warren Buffett rich, appears to be working in the short-term, at least for a few names.
AMC issues shares, stock pops. It’s not always the case that when you dilute shareholders you’re rewarded with a jump to your stock price, but that’s what happened to movie theater chain AMC Entertainment ( AMC) on Monday as it raised more than $900 million through a mix of debt and equity capital as it seeks to demonstrate it has enough cash to weather an extended pandemic decimating its business.
Shares of AMC rose more than 25% on the news.
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