GameStop, AMC decline as meme stock rally fizzles after just two days

GameStop and AMC shares fell in premarket on Wednesday as the meme stock trading frenzy showed signs of fizzling.

Brick-and-mortar video game retailer GameStop fell 13%, while movie theatre chain AMC dropped 12%.

The sell-off in AMC shares came after the firm announced a debt-for-equity swap. AMC will issue 23.3 million shares in a debt-for-equity exchange for $163.9 million of bonds that mature in 2026.

The meme stock craze resurged on Monday, seemingly reignited by a rare social media update from “Roaring Kitty.” The man, whose legal name is Keith Gill, posted a picture on the X social media platform of a video gamer sitting forward on their chair — a meme used by gamers to indicate they are taking the game seriously.

Gill, also known as DeepF——Value on Reddit, is a former marketer for Massachusetts Mutual Life Insurance, who previously led a host of day traders piling into GameStop back in 2021.

The return of the meme stock phenomenon brought GameStop and AMC shares up over 70% on Monday, with the stock extending gains into Tuesday. Enthusiasm appeared to be fading by the close of the previous session.

Speaking on CNBC’s “Street Signs Europe” on Tuesday, Smead Capital Management CEO Cole Smead described the meme stock craze as “frankly stupid.”

“It is gambling,” he said.

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