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29 Jan 2021
3 min read

GameStop, AMC Stocks Bounce Back, Elon Musk Moves Bitcoin

GameStop, AMC Stocks Bounce Back, Elon Musk Moves Bitcoin

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Key Takeaways

  • Elon Musk changes Twitter bio and sends digital coin to new levels
  • Retail traders cause stock frenzy

The markets are focused on retail investors today. The enthusiastic Reddit retail investors continue to pile on stocks shorted by hedge funds. In the after-hours trading, GameStop, AMC, and BlackBerry are pointing to higher opens with outsized gains. GameStop shares recover their losses after some trading apps restricted the buying of the company’s shares on their platforms. The move by the brokers infuriated retail traders who vowed to hold the stock with “diamond hands”. GameStop shares are up over 100% in pre-market trading on Friday after the trading curbs have been lifted. AMC shares are also significantly higher in pre-market, showing a higher open by over 50% when the US session kicks in.

Going over to the cryptocurrency market, Bitcoin’s muted trading for the past few days was interrupted by a Twitter bio change of Tesla CEO Elon Musk. The number one cryptocurrency shot up over 18% following Mr. Musk’s new Twitter bio which now reads: #bitcoin.

The Elon Musk Effect

The single word by the billionaire Tesla founder and the world’s wealthiest man was enough to send the digital coin to levels over $38,000 just minutes after it was hovering near $32,000. The bio change was followed by a tweet from him saying: “In retrospect, it was inevitable”. Although, the price of bitcoin has now relaxed and is trading near $37,000, the bitcoin mention by Elon Musk was greatly cheered by the retail trading community.

Previously Elon Musk had tweeted about Dogecoin, a cryptocurrency that originated as a joke. In the last few days, Dogecoin surged by more than 700% to reach an all-time high above $0.07 with a market valuation of nearly $10bn. Yesterday, Elon Musk posted an image on Twitter of a “Dogue” magazine cover with a whippet in a red outfit.

This week the magnate also played a key role in the massive surge in individual stocks and cryptocurrencies. On Jan 26, shortly after the GameStop rally started, Mr. Musk tweeted “Gamestonk!!” which was largely cheered by day traders who became even more thrilled to participate in the buying frenzy.

The extreme volatility in the past couple of days has been driven by a strong risk appetite coming from retail investors who, through a collaborated effort, have been able to massively affect prices and even threaten the existence of large hedge funds. The GameStop-fueled volatility drags on the global markets this week as European stocks and US futures drop on Friday, on their way to close their worst week since October.

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