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GameStop shares slump as Reddit rally ebbs

3d printed Robinhood and Reddit logos are seen in front of displayed GameStop logo

(Reuters) – Shares of videogame retailer GameStop Corp slumped on Monday, losing ground along with a slew of other social media-hyped stocks that took investors on a wild ride earlier this month.

GameStop and other “meme stocks,” including cinema operator AMC Entertainment Holdings Inc and headphone maker Koss have seen wild gyrations in their share prices over the past two weeks as amateur investors on forums such as Reddit’s WallStreetBets acted in concert to bid up stocks that some U.S. funds had bet against.

The volatility has drawn the attention of regulators, although U.S. Treasury Secretary Janet Yellen said on Sunday it was too soon to say whether new policies or regulations were needed.

On Monday, GameStop shares, which soared from about $20 early in year to $483 on Jan. 28, rose before the U.S. stock market opened. But they closed down 5.91% at $60. AMC shares dropped 9.5% and Koss shares lost 4.9%.

Trading volumes in GameStop also appeared to be trending lower: Some 25.5 million shares traded on Monday, compared with a record of 197.16 million shares on Jan. 22. Still, the 10-day average volume of about 86.1 million shares was well above the stock’s 50-day moving average volume of roughly 37.5 million.

Focus shifted to other corners of the market, after billionaire Elon Musk’s electric vehicle company Tesla Inc revealed it had invested $1.5 billion in bitcoin, driving a 16% surge in the world’s most widely held cryptocurrency to over $43,000.

On WallStreetBets, some denizens exhorted one another to stay in GameStop stock, while others waxed ironic.

“Whoa! There are people still in GME? LOL,” wrote user possumtree.

(Reporting by Chuck Mikolajczak in New York and Sagarika Jaisinghani in Bengaluru; Additional reporting by Krystal Hu and Ira Iosebashvili; Editing by Bernard Orr, David Gregorio and Cynthia Osterman)

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