GameStop shares surged another 80 percent on Wednesday on Wall Street boosted by increased interest among amateur investors who have lifted the share price by over 700 percent in the past two weeks.

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A pair of professional investment firms that placed big bets that money-losing video game retailer GameStop's stock will crash have largely abandoned their positions. The victors: an army of smaller investors who have been rallying on Reddit and elsewhere online to support GameStop's stock and beat back the professionals.

GameStop is a videogame hardware and software company and was doing badly on the stock exchanges before the pandemic and did disastrously through 2020. However, the stock has doubled in the last two days and has given whopping returns of over 700 percent just in the first month of 2021 and 50 percent in just the previous session.

Meanwhile, Elon Musk, CEO of Tesla, yesterday tweeted "Gamestonk!!", along with a link to Reddit's Wallstreetbets stock trading discussion group, where supporters affectionately refer to the Tesla CEO as "Papa Musk." "Stonks" is a tongue-in-cheek term for stocks widely used on social media. The impact of Musk's tweet is probably being seen today on Wall Street.

Explained:

Why US-listed GameStop has risen over 700% in January 2021

Trading in GameStop stock was halted for volatility nine times on Monday and five times on Tuesday.

One of the two major investors that surrendered, Citron Research, acknowledged Wednesday in a YouTube video that it unwound the majority of its bet that GameStop stock would fall. Andrew Left, who runs Citron, said it took “a loss, 100%” to do so, but that does not change his view that GameStop is a loser.

“We move on. Nothing has changed with GameStop except the stock price,” Left said. He did acknowledge that Citron is taking a fresh look at how it bets against companies, in light of the GameStop campaign.

Melvin Capital is also exiting GameStop, with manager Gabe Plotkin telling CNBC that the hedge fund was taking a significant loss. He denied rumors that the hedge fund will fail.

(With inputs from Reuters and AP)

(Edited by : Abhishek Jha)

First Published:Jan 27, 2021 8:57 PM IST