(Source – Vox)
Retail favorites GameStop and AMC witnessed a continued downturn in premarket trading on Thursday, signaling a wane in enthusiasm following the resurgence of “Roaring Kitty,” a central figure in the 2021 meme stock rally.
Shares of GameStop, the struggling videogame retailer, plummeted by 16% to $33, a stark decline from the peak of $64.83 earlier in the week. Meanwhile, AMC, the theater chain, experienced a 13% decrease, despite an 88% surge since Friday’s closing.
Pre-market Trading Sees Significant Losses
Data from J.P. Morgan revealed that despite Wednesday’s losses, both companies remained among the top three most-traded shares by retail investors throughout the week, maintaining a consistent position since Monday.
The recent surge in shares was ignited by a series of posts from Keith Gill’s online persona “Roaring Kitty,” renowned for his bullish stance on GameStop during the 2021 meme stock frenzy.
However, unlike the events of 2021, where Reddit users collaborated to target heavily shorted stocks, this time around, both retail and institutional investors joined the meme stock hype, according to Vanda Research, which tracks retail investor flows.
Since the initiation of his posts on Sunday, Gill has been sharing numerous cryptic video clips daily on his online platform. Despite requests for comment on the significance of these posts and his investment plans, Gill has remained silent.
Retail Investors Remain Active Despite Declines
Former U.S. SEC Chair Jay Clayton expressed concerns about the impact of these posts, stating to CNBC that they have triggered “a wave of euphoric and speculative buying in the retail trading community,” cautioning against such behavior. However, he clarified that expressing positive sentiments towards a stock is not illegal.
While retail purchases of GameStop decreased to $5.7 million in the previous session from a high of $15.9 million on Tuesday, AMC witnessed a similar decline in daily retail inflows, dropping to $7.7 million on Wednesday from $51 million the day before, according to Vanda data.
The downward trend extended to other highly shorted stocks that experienced a surge earlier in the week. Tupperware shares fell by 7% to $1.68, while U.S.-listed BlackBerry shed 4.6% amidst the broader market retreat.
As the “Roaring Kitty” hype dissipates and concerns about speculative trading persist, investors are closely monitoring the trajectory of GameStop, AMC, and other meme stocks, anticipating further market volatility in the days ahead.
