GameStop, AMC Skyrockets over 50%, But Will Rally Last?

Shares in GameStop, AMC exploded as Keith Gill's return stoked hopes of another meme stock frenzy like 2021. But analysts doubt sustainability this time.

Key Insights

  • GameStop and AMC shares soared over 50% premarket after “Roaring Kitty” Keith Gill returned to social media, reviving the 2021 meme stock frenzy.
  • Other meme stocks like BlackBerry and Koss also saw big premarket gains, while meme cryptocurrencies spiked sharply.
  • Analysts doubt conditions are ripe for a sustained rally like 2021 given higher rates and inflation.

NEW YORK (Reuters) – Shares of GameStop Corp GME.N and AMC Entertainment Holdings Inc AMC.N jumped more than 50% in premarket trading on Tuesday, putting them on track to extend a rally from the previous session after Keith Gill, the investor known as “Roaring Kitty,” re-emerged on social media.

GameStop, the video game retailer at the center of the 2021 meme stock trading frenzy, was up 50% at $26.43 in early deals. AMC, the movie theater chain, surged 53.2% to $10.36.

Other so-called meme stocks were also poised for sharp gains, with BlackBerry Ltd BB.TO climbing 28% and headphones maker Koss Corp KOSS.O up 22%.

The premarket moves followed dramatic increases on Monday when GameStop soared 74.4% and AMC jumped 78.4%, reigniting the wild ride in shares of companies popular among retail investors on social media platforms like Reddit’s WallStreetBets forum.

The renewed meme stock mania appears driven by Gill’s first social media post since 2021, an image on platform X of a gamer leaning intensely over a controller that has been viewed over 23 million times so far.

Gill has followed up with posts of brief video clips from movies and TV shows, though their significance remains unclear.

Known as “DeepF——Value” on Reddit, the former insurance marketer attracted legions of amateur traders in 2020-2021 who piled into GameStop shares and options in an effort to squeeze hedge funds that had shorted the stock.

While some crypto enthusiasts hope Gill’s return will spark another surge of meme-fueled retail trading, analysts are skeptical the conditions are ripe for a repeat of two years ago when low interest rates and government stimulus fueled a speculative frenzy.

“It will certainly ignite some short-term moves…but it’s hard to see any longevity,” said Josh Gilbert, market analyst at eToro.

“The environment is just not comparable to 2021 when interest rates were at rock bottom, governments were providing fiscal stimulus globally, and major economies had little to no inflation.”

Gilbert noted the much smaller short interest in GameStop now compared to 2021, meaning any short squeeze “move to the upside” would be more limited in scope.

Still, the over 14.5 million members of WallStreetBets have proven adept at coordinating to drive meme stock rallies in the past couple of years.

“That said…anything is possible,” Gilbert added.

Several meme-inspired cryptocurrencies also surged amid the frenzy, with a coin named GameStop (GME) – which has no official affiliation with the company – soaring more than 344.01% in 24 hours, according to data firm coinmarketcap.

GameStop price today is $0.017829 USD with a 24-hour trading volume of $194,412,309 USD. Source: CoinMarketCap

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