GameStop and AMC slumped on Wednesday as the “meme stock rally” driven by the surprise return of “Roaring Kitty” showed signs of fizzling out.
Shares of GameStop were down by 31%, to $32.40 per share, after posting sizable gains in each of the previous two trading sessions.
AMC sank about 25% to $5.10 per share.
The two firms had gained more than $11 billion combined in market value since the start of the week.
Even the comeback of Roaring Kitty – the retail investor named Keith Gill who inspired the film “Dumb Money” may not be enough to overcome tough market conditions this time around.
Gill sparked a frenzy in 2021 in which retail day traders bought stock in struggling firms like GameStop and AMC to squeeze short-seller.
“This time it is different,” Ben Laidler, global markets strategist at eToro, told Bloomberg. “The pandemic lockdown is over. Excess consumer savings are largely long spent. Short positions in these stocks are much smaller though not small. Interest rates are much higher.”
Gill, who also goes by the moniker “DeepF—kingValue” on Reddit, reignited interest in the struggling retailers after he shared a series of memes on X earlier this week.
The posts, his first public interaction since 2021, included a meme of a video game player leaning forward in his chair and a series of movie clips from popular TV shows and movies such as Marvel’s “Avengers” and “Breaking Bad.”
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 top trades among investors on Monday and Tuesday following Roaring Kitty’s return, according to data from Vanda Research cited by Bloomberg.
As in 2021, experts said the spike in interest was disconnected from fundamentals, since neither company has posted strong financial results in recent quarters.
“The only environment where GameStop and AMC and the likes of BlackBerry and other, I would say, trash stocks, would succeed is in an environment where anything and everything can go higher,” Longbow Asset Management CEO Jake Dollarhide told The Post earlier this week.
For AMC, the downtick coincided with an announcement that the company will issue shares to slash $164 million in debt via bonds that mature in 2026.
