GameStop, AMC slide further as meme stocks rally tapers off
GameStop and AMC continued their slide for a second straight session on Thursday, as the euphoria over the return of "Roaring Kitty", who was the central figure in 2021 meme stock rally, fizzles out.
Shares of the struggling videogame retailer GameStop fell 12% to $34 after jumping as much as $64.83 this week, while fetching $1 billion in losses for short sellers, according to Ortex Technologies. Theater chain AMC shed 5.5% following an 88% gain since Friday's close.
Despite the losses on Wednesday, the two companies were among the top three most-traded shares by retail investors during the session, data from J.P.Morgan showed.
The sharp surge in the shares began after a series of posts from Keith Gill's X account «Roaring Kitty», whose bullish posts on GameStop was a reason for the 2021 meme stocks frenzy.
But unlike 2021, when Reddit users banded together to target highly shorted stocks that burnt bearish hedge funds, this time institutional investors too were part of the meme stock mania, Vanda Research, which tracks retail investor flows, said.
«The short sellers three years ago were completely surprised by the magnitude of the mass purchases and ultimately overwhelmed by the size of the short squeeze,» said Rick Meckler, partner at Cherry Lane Investments.
«They have likely learned from that experience and left themselves less exposed thereby reducing the potential for extended upward pressure.»
Hedge fund Renaissance Technologies placed a new bet for GameStop shares to rise further and significantly
