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Retail favorites GameStop and AMC saw further declines in premarket trading on Thursday, signaling a downturn in the excitement surrounding the resurgence of “Roaring Kitty,” a central figure in the 2021 meme stock rally.
Market Performance:
GameStop’s shares fell by 14% to $34 after experiencing a surge earlier in the week, resulting in substantial losses for short sellers. Similarly, AMC, the struggling theater chain, dropped by 12% despite significant gains since the previous Friday’s close.
Despite the recent losses, according to J.P. Morgan data, GameStop and AMC remained among the top three most-traded shares by retail investors throughout the week.
The Role of “Roaring Kitty:”
The share surge followed a series of posts from Keith Gill, also known as “Roaring Kitty,” reminiscent of his bullish activity during the 2021 meme stock frenzy.
According to Vanda Research, unlike the previous meme stock rally, institutional investors are now actively participating in the market frenzy alongside retail traders.
Market Dynamics:
Ben Laidler of eToro noted that while there are more retail investors today, their impact on the market rally is not as pronounced as before, with many retail investors exercising caution after suffering losses in the previous rally.
Despite recent market activity, GameStop and AMC stocks remain significantly below their 2021 peaks, indicating the challenges both companies face.
“Roaring Kitty’s” Activity:
Keith Gill’s recent cryptic posts on X.com have generated speculation, although he has not publicly disclosed his investment plans.
Former U.S. SEC Chair Jay Clayton warned about the speculative buying triggered by Gill’s posts, emphasizing the risks associated with such market behavior.
According to Vanda data, retail purchases of GameStop and AMC fluctuated, with daily inflows decreasing from recent highs.
Market Reaction:
Other highly shorted stocks that experienced increased activity this week also saw declines on Thursday, reflecting broader market trends.
According to Options Clearing Corp, GameStop and AMC remained among the top securities with the highest options volume. The majority of traders opt for call options, which speculate on a stock’s rise.
