Bengaluru, India – As the buzz surrounding the resurgence of “Roaring Kitty” diminishes, both GameStop and AMC are facing a rapid decline in premarket trading. The once-beloved retail giants have experienced a significant drop in share prices, leading to substantial losses for short sellers. GameStop shares plummeted by 14% to $34, while AMC saw a 12% decrease after an initial 88% gain.
Despite the recent setbacks, data from J.P.Morgan revealed that GameStop and AMC remained among the top three most-traded shares by retail investors throughout the week. This surge in trading activity was triggered by a series of bullish posts from Keith Gill, also known as “Roaring Kitty,” who played a central role in the meme stock frenzy of 2021.
Interestingly, unlike the previous meme stock craze, institutional investors have also joined the fray this time around. Vanda Research pointed out that professional investors are closely monitoring social media trends and capitalizing on the momentum generated by retail investors. However, the enthusiasm from retail investors seems to be more cautious this time, as many are still reeling from losses incurred during the previous market frenzy.
Both GameStop and AMC are still far from their peak levels during the 2021 meme stock rally, with GameStop trading nearly 70% below its highest point. As for AMC, the stock remains 98% lower than its record high. Despite the decline in retail purchases for both companies, high shorted stocks such as Tupperware, BlackBerry, and Koss Corp also experienced losses on Thursday.
The influence of social media on stock trading has once again come into focus, with former U.S. SEC Chair Jay Clayton warning against speculative buying driven by online hype. Retail purchases of GameStop and AMC have shown fluctuations in recent sessions, reflecting the unpredictable nature of meme stock trading dynamics.
Overall, the continued volatility in the market serves as a reminder of the risks associated with meme stocks and the potential impact of social media on investment decisions. As investors navigate this uncertain terrain, the legacy of “Roaring Kitty” and the meme stock movement will undoubtedly continue to shape the landscape of retail trading.