GameStop soars to erase $4-billion hole as meme stocks roar

GameStop Corp. rallied to erase its earnings-led slump as Reddit-favorite stocks surged and traders touted the company’s ongoing corporate transformation.

The video-game retailer rallied 53% to $183.75, recouping all of its $4.3 billion drop after quarterly earnings failed to answer Wall Street’s most pressing questions on the company’s turnaround. Fellow retail darlings like movie theater company AMC Entertainment Holdings Inc. and headphone maker Koss Corp. followed GameStop higher on Thursday.

Shares of Grapevine, Texas-based GameStop have been a poster child for Reddit-armed retail traders looking to rally against short sellers. Thursday’s rally came amid a flood of trading activity, with more than 49 million shares changing hands — almost three times the amount that has been traded in the past week.