GameStop mania goes global as retail traders gang up on shorts

New York

THE market drama surrounding GameStop is spreading ever further beyond Wall Street, whipsawing stocks from Amsterdam to Sydney, as traders race to bet on where the flood of retail money might head next.

Heavily shorted companies have emerged as the biggest targets, after an epic short squeeze in GameStop helped drive up the stock more than 400 per cent this week. In Europe, short-seller favourites including Unibail-Rodamco-Westfield jumped 20 per cent or more. E-commerce giant Rakuten and baby-care goods maker Pigeon climbed at least 6.9 per cent in Tokyo on Thursday.

The GameStop effect is also playing out in different ways. Day traders in India have been piling into the stock, which accounted for about 15 per cent of volume on one popular platform allowing locals to bet on US equities.

An Australian company that has "GME" in its ticker symbol jumped as much as 60 per cent on Thursday, an apparent case of mistaken identity. Some chat rooms frequented by retail investors in China were abuzz with opportunities to pump up share prices.

While GameStop's extraordinary gain has captivated much of the financial world this week, few could have predicted the ripple effects emerging from Reddit's WallStreetBets forum would be so far-reaching.

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign UpVIEW ALL

Of course, it is hard to know how much of these swings are being fuelled by retail investors as opposed to short sellers who have protectively closed out positions to reduce risk. Either way, the market dynamics have clearly shifted for many stocks.

"Fundamentals are completely irrelevant," said Chris Weston, head of research at Pepperstone Group in Melbourne. "This is all momentum now."

Here are some of the most notable stock moves over the past 24 hours: In Australia, heavily shorted funeral-home operator InvoCare was among the top performers on the benchmark S&P/ASX 200 Index on Thursday.

Aside from Rakuten and Pigeon, other heavily shorted Japanese stocks recording gains included HIS, Mitsubishi Motors and Dentsu Group.

GameStop and AMC Entertainment Holdings were the most-active US stocks on Wednesday on a trading app run by Shenzhen-based Futu Holdings, which serves individual investors in mainland China and Hong Kong.

Notable gainers in Europe included education publisher Pearson, French real estate company Klepierre SA and Polish video-game maker CD Projekt SA. BLOOMBERG