Two meme stocks rose on Thursday by retail investors despite extensive market sell-offs, as GameStop’s stock price surged more than 20% and then halted several times with volatility, while AMC Entertainment also rallied more than 10%.
Despite continued market selling that drove the S&P 500 into bear market territory on Thursday, meme stocks defied the trend and surged higher as individual investors bought the stock.
Shares of video game retailer GameStop halted up to four times in bizarre trading on Thursday morning, rising up to 33% at one point before cutting profits somewhat.
Shares of movie theater chain AMC Entertainment also surged, surging as high as 29% early in the morning and then bottoming again.
Two stocks favored by retail investors were still significantly higher on Thursday, with GameStop rising more than 13% to trade at $93 a share, while AMC gained nearly 15% to trade at nearly $12 a share.
According to FactSet, GameStop holds 21.4% and AMC holds 19.5% short.
A large short position in a company can often lead to sharp fluctuations in stock prices. This is because individual investors create “short pressure” that pushes stocks, which can cause hedge funds to liquidate short sellers and apply more buying pressure.
Despite rising on Thursday, the meme stock has struggled this year and has been the victim of a broad market-shaking sell-off. GameStop shares are down about 45% in 2022, while AMC is down more than 60%.
GameStop and AMC were at the heart of “meme stock mania” in early 2021 when retail investors used online forums like Reddit’s “Wall Street Bets” to use coordinated deals to boost stock prices, often using hedge funds and Inflicted huge losses on other short selling. bet on them. GameStop’s share price rose to $483 per share in January 2021, while AMC peaked at around $60 per share in June of last year.
GameStop’s share price has risen in recent months as investors support the company’s plans to enter the Non-Fungible Token (NFT) arena. GameStop announced in March that it plans to create an NFT Marketplace by the end of July. At the end of the same month, the company presentation It will ask shareholders to approve the stock split, making it easier for individual investors to purchase the stock. While stock splits do not change the intrinsic value of a company, they often provide a short-term rise in stock prices, causing some buzz.
Meme stocks and cryptocurrencies surge again as experts warn of ‘dangerous’ market conditions.Forbes)