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GameStop: Did cryptic ice cream cone tweet start new stock price frenzy?

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Andrew Griffin
·2-min read
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Financial Markets-GameStop (Copyright 2021 The Associated Press. All rights reserved.)
Financial Markets-GameStop (Copyright 2021 The Associated Press. All rights reserved.)

A tweet including a picture of an ice cream might be one reason for GameStop’s new, unexpected price surge.

The stock – which just weeks ago was at the centre of a short squeeze that sent its price up 1,600 per cent, generating huge gains for the Reddit community who had backed it – was once again up on Wednesday evening and Thursday.

The volatility in the shares was so high that exchanges repeatedly had to stop trading in order to preserve stability.

And all of that excitement could be down to that McDonald’s ice cream, which appeared on Twitter.

It is still not clear what kicked off the new surge. As with any stock movement, pinning it down to one cause is impossible, given the number of different mechanics at work in the stock market.

What’s more, GameStop is such a closely watched stock that any movement is likely to be amplified. Investors who followed the stock through its last volatile movement are likely to jump on any change as an indication of another one – and so put money into the shares, sending their price upwards.

But one event that at least seems to have helped the stock is the tweet, showing a picture of an ice cream and an emoji frog, sent by Ryan Cohen.

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It was clear from the responses to the tweet that there was no obvious explanation for it. “What does it mean”was the most common response, while some other users suggested they had worked out what the code might indicate.

But whatever the tweet was actually meant to indicate, it was taken as an indication of good news by many of the people who follow the stock. Mr Cohen is a favourite of the Wall Street Bets community that sent GameStop’s price up last time around – users refer to him as “Papa Cohen” – and so any indication of activity is likely to be taken as positive.

Mr Cohen is an activist investor with a significant holding in GameStop and a place on its board. He is the founder of Chewy, an online pet store, and has suggested that GameStop could have similar success as a video game retailer.

That is in line with the hopes among investors on WallStreetBets and elsewhere that GameStop could prove those who shorted the stock wrong, and see off its issues with being a brick and mortar retailer in the middle of a pandemic and a switch to downloading rather than buying physical copies of games.

Whatever happened, it was soon after Mr Cohen’s post that the shares started rising. As they did, a host of other reasons for the rise came into view, as social media users encouraged others to put their money into the stock.

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