GameStop and AMC fell sharply on Wednesday as the “meme stock rally” sparked by the surprise return of “Roaring Kitty” showed signs of coming to an end.
GameStop stock fell 31% to $32.40 per share after posting strong gains in each of the past two trading sessions.
AMC fell about 25% to $5.10 per share.
The companies have gained a combined market value of more than $11 billion since the beginning of the week.
Even the return of Roaring Kitty, a private investor named Keith Gill, who was the inspiration for the movie “Damn Money,” may not be enough to overcome these tough market conditions.
Mr. Gill sparked a frenzy in 2021 in which retail day traders bought stocks of distressed companies like GameStop and AMC to squeeze short sales.
“This time is different,” said Ben Laidler, global market strategist at eToro. told Bloomberg. “The pandemic lockdown is over. Most of consumers’ excess savings will be spent over a long period of time. Short positions in these stocks are not small, but they are much smaller. Interest rates are It’s much higher.”
Gill, who also goes by the nickname “DeepF—kingValue” on Reddit, shared a series of memes on X earlier this week that reignited interest in the struggling retailer.
The posts, his first public interaction since 2021, included a meme of a video game player slouching in a chair and a series of popular TV shows and movies, including Marvel’s “The Avengers” and “Breaking Bad.” Contains movie clips.
The X account @TheRoaringKitty continued posting movie clips on Wednesday, but Gill has yet to personally reveal his next move.
GameStop and AMC shares were among the most traded among investors on Monday and Tuesday following Roaring Kitty’s resurgence, according to data from Vanda Research cited by Bloomberg.
Experts said the spike in interest is unrelated to fundamentals, as neither company has reported strong financial results in recent quarters, as they did in 2021.
Jake Dollarhide, CEO of Longbow Asset Management, said earlier this week that “The only environment in which GameStop and AMC and BlackBerry and other trash stocks will succeed is if everything can go up.” It’s a very sexual environment,” he told the Post. .
For AMC, the decline coincided with the company’s announcement that it would issue stock to reduce $164 million in debt through bonds that mature in 2026.
