State regulator says GameStop trading could be ‘systemically wrong’

Business

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BOSTON (Reuters) — Top securities regulator in Massachusetts thinks trading in GameStop Corp stock, which skyrocketed for a fourth straight day, suggests there is something “systemically wrong” with the options trading surrounding the stock, Barron’s reported on Tuesday.

The video game retailer’s after-hours surge added to a 93% jump during Tuesday’s trading session, with the company’s stock propelled by traders on Wallstreetbets, many of them buying volatile call options.

“This is certainly on my radar,” William Galvin, secretary of the Commonwealth of Massachusetts, told the magazine. “I’m concerned because it suggests that there is something systemically wrong with the options trading on this stock.”

GameStop and the office of the securities regulator in Massachusetts did not immediately respond to Reuters’ request for comment outside business hours.

The stock surged 50% in extended trade after Musk tweeted “Gamestonk!!”, along with a link to Reddit’s Wallstreetbets stock trading discussion group. “Stonks” is a tongue-in-cheek term for stocks widely used on social media.

GameStop has surged more than seven-fold to $147.98 from $19 since Jan. 12, spurring concerns over bubbles in stocks that hedge funds and other speculative players bet will fall in value.

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