In a whirlwind of trading activity reminiscent of the 2021 meme stock frenzy, GameStop (GME) and AMC Entertainment Holdings (AMC) saw their shares soar on Tuesday, igniting fresh enthusiasm among retail traders and investors alike.
The Surge
GameStop’s stock surged by nearly 60% on Tuesday, building on a meme-fueled rally that had seen a 74% increase in the prior session. Similarly, AMC saw a surge in its stock price, with shares rising approximately 30%, reaching as high as 120% earlier in the day.
AMC announced that it had issued approximately 72.5 million new shares, raising around $250 million for the company, coinciding with the surge in GameStop.
Other heavily shorted stocks also experienced notable gains, including SunPower (SPWR) with a 63% increase, Beyond Meat (BYND) up by 25%, and the Children’s Place (PLCE) rising approximately 6%.
The Return of “Roaring Kitty”
Keith Gill, also known as “Roaring Kitty,” whose bullish stance on GameStop played a significant role in the 2021 meme stock rally, is partially responsible for the resurgence in GameStop’s stock. Gill’s renewed interest in GameStop reignited enthusiasm among retail traders, contributing to the recent surge in the stock’s price.
Despite GameStop’s flat performance year-to-date leading up to the rally, the stock has seen a remarkable increase of over 180% in the last month alone, excluding Tuesday’s gains.
Short Sellers Under Pressure
Short sellers, who bet against these companies, faced significant losses amid the rally. GameStop shorts were down $1.36 billion on Tuesday, following losses of almost $900 million the previous day. Data from S3 Partners shows that short interest in GameStop has remained elevated since the 2021 meme rally, accounting for nearly 24% of the float.
The Significance
While some view the recent rally as a continuation of the 2021 meme stock phenomenon, others see it as a symbol of the ongoing struggle between retail investors and institutional players. YouTuber Matt Kohrs believes that GameStop represents a populist movement against the perceived dominance of the powerful elite in the financial markets.
Despite the frenzy surrounding GameStop and AMC, opinions on the significance of the rally vary. While some view it as a transformative moment akin to the events of 2021, others see it as a smaller-scale phenomenon driven by changing market dynamics.
Regardless of differing perspectives, one thing is clear: GameStop and AMC’s recent surge has once again captured the attention of investors and traders worldwide, underscoring the power of retail investors in shaping market trends and challenging conventional wisdom.
