Many Reddit-based traders have found an increased appetite for risk after banding together to oppose Wall Street pros.
GameStop Corp., one of the popular “meme” companies whose stock has soared this year, said U.S. securities regulators are looking into the trading of its shares.
The video-game retailer said Wednesday that staffers from the Securities and Exchange Commission contacted the company on May 26, for voluntary production of documents and information related to the stock.
“We are in the process of reviewing the request and producing the requested documents and intend to cooperate fully with the SEC staff regarding this matter,” the company said in a quarterly filing. “This inquiry is not expected to adversely impact us.”
Since February, securities regulators have been combing social media and message-board posts for signs that fraud played a role in dizzying stock swings for GameStop, AMC Entertainment Holdings Inc. and other companies, people familiar with the matter said at the time.
GameStop is one of a handful of stocks that have been fueled by Reddit traders who invest based on social-media buzz. Shares of the money-losing chain have gained 1,500% this year, closing Wednesday at $302.56.
The stock fell as much as 13% in extended trading after the company announced it may issue new shares, along with the hiring of two Amazon.com Inc. veterans for top leadership roles and fiscal first-quarter results.