GameStop and AMC tumble as meme stocks rally deflates
GameStop and AMC fell for a second straight session on Thursday, as excitement over the social media return of "Roaring Kitty," who was the central figure in 2021 meme-stock rally, fizzles out.
Shares of the videogame retailer GameStop tumbled 30% to close at $27.67 after jumping as high as $64.83 on Tuesday. Theater chain AMC closed 15.3% lower at $4.64.
Both companies' shares have fallen sharply from gains in the first two sessions of the week following a series of posts from Keith Gill's X account «Roaring Kitty,» whose bullish calls on GameStop were a reason for the 2021 meme-stock frenzy.
Unlike 2021, when Reddit users banded together to target highly shorted stocks that burned the bearish bets of hedge funds, 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.»
Short interests, or bets on a stock's decline, have stayed mostly flat for both GameStop and AMC this week, analytics firm Ortex Technologies said.
Short sellers took unrealized losses worth $1.14 billion this week from their bets against the two struggling companies and were set to make just about $460 million in paper gains
