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GME Resources, a tiny mining company located in western Australia, was as surprised as anyone when its stock price surged by 33% on Thursday. The stock continued to climb on Friday, reaching a peak of .13 Australian dollars, a 73% jump from its Wednesday closing price.
“I was stunned,” James Sullivan, GME’s managing director, told the Sydney Morning Herald on Thursday. “It just went bang, and I thought, ‘Well, what’s going on here?′ Is there something about my own company that I don’t know?”
Sullivan said he asked around the office about the trading frenzy that sent the company’s stock skyrocketing. “I was hoping to be able to say it was more to do with our world-class nickel projects,” Sullivan told Australian media.
Not quite.
Sullivan’s nephew eventually told him that the trading surge was likely related to GameStop, a U.S. brick-and-mortar gaming retailer that has taken Wall Street by storm this week after a group of Reddit-based retail investors purchased GameStop stock to squeeze out hedge funds that had bet on its downfall.
GME Resources trades on the Australian Stock Exchange with the stock code GME, the same ticker that Gamestop uses on the New York Stock Exchange, meaning retail investors may have mixed up the two, accidentally investing in the mining firm instead of the video game store.
Amid the flurry of investment activity, the Australian Stock Exchange temporarily halted trading on GME Resources’ stock on Friday.
“The securities of GME Resources Limited (‘GME’) will be placed in trading halt at the request of GME, pending it releasing an announcement,” the ASX said in a statement Friday.
Trading resumed just an hour later after GME Resources posted a statement to the exchange, apparently in response to the ASX inquiring about the unusual fluctuations in its stock price.
In the statement, GME Resources denied playing any role in the unusual trading activity and suggested that its stock surge may be due to the chaos surrounding GameStop in the U.S.
“The Company notes recent media reports concerning trading activity in a U.S. listed technology company called GameStop which also has an exchange ticker code ‘GME’ but notes this company is not related in any way to GME Resources Limited,” Mark Pitts, GME Resources’ company secretary, said in a statement to the exchange.
In the Reddit forum ASX_bets, the Australian version of the now famous wallstreetbets, users appeared to delight in the GME Resources’ stock rise. They also indicated that GME Resources’ stock bump may not be entirely due to investors mistaking it for GameStop.
After one user accused other Redditors of mixing up Australia’s GME Resources and the U.S.’s GameStop, other users replied that they understood the difference between the two companies.
“No, I know what I’m doing. GME [Australia] to the moon,” one user said. (Redditors often use the phrase “to the moon” or a rocket emoji to indicate explosive growth potential.)
Still, after resuming trading on Friday, GME Resources’ stock price has come back down to earth.
As of midday on Friday, GME Resources is trading at .081 Australian dollars ($.061), down 52% from its Friday morning high of .13 Australian dollars ($.09) and up only 8% from its closing price on Wednesday.
