- GME, AMC meme stocks gain more than 100% in premarket.
- Prices descend to +50% to +80% gains in regular market on Tuesday.
- Keith Gill continues to post video clips on social media, hyping up his retail followers.
- GameStop recorded more than 17 times the usual volume on Monday.
GameStop (GME) and AMC Entertainment (AMC) are at it again on Tuesday. Both stocks more than doubled in Tuesday’s premarket as more retail investors piled into 2021’s favorite meme stocks.
Shares of both companies have since receded to between 50% and 80% gains in the regular session, due in part to a number of exchange halts resulting from extremely volatile price action. In the first half hour of the regular session, for instance, GME stock plunged rather suddenly from $64 to $45.
The broader US market is advancing gingerly on Tuesday morning despite April’s US Producer Price Index printing slightly higher than expected at 0.5% MoM. Economists had averaged a 0.3% forecast prior to the release.
GameStop & AMC stock news
Very little of substance has happened since Monday’s incredible gains for both meme stocks. GameStop gained 74.4% on Monday with more than 17 times the usual level of volume. AMC stock gained slightly more on Monday at 78.4%.
The only news of note is that since Keith Gill reignited the meme stock fury over the weekend by posting a meme. Gill was the adopted leader of the meme stock craze in 2021 that launched first GME and then AMC into a series of historic short squeezes that eventually caused a hedge fund short-seller to close its doors.
Since Sunday’s return from a self-imposed hiatus on social media, Gill has been posting hype clips from various films and television shows, including Breaking Bad, Snatch, Gangs of New York, Peaky Blinders, Tombstone and The Good, the Bad and the Ugly
Meme stocks FAQs
Meme stocks are stocks favored by retail traders – but not by professional or institutional traders – that grow popular through its backers publishing memes on social media websites to win converts. Images or GIFs are typically used to transmit some type of excitement, committment or comedy regarding investment in the stock. These stocks normally are beaten down names that appear to have an uncertain or dour future based on falling sales figures or rising losses. Interest in these names normally comes from either belief in a turnaround story or its heavy short ratio.
Online investing forums like Reddit’s r/WallStreetBets are known to be breeding grounds for meme stocks. Normally, some small group of posters begin making memes of a stock they are buying. If the argument behind it is cogent or even just funny, the memes may provoke other retail investors to jump aboard. Interestingly, the merits of a stock are normally immaterial to it becoming a popular meme stock other than it being abandoned by the wider market and thus cheap. Stocks with high short ratios are usually likely to become meme stocks, because the nature of the argument for investing in the stock is that it can be the subject of a short squeeze.
A short squeeze is when investors swiftly buy up the shares of a heavily-shorted stock. Because the stock is heavily shorted, there is a dearth of available shares to purchase. This allows smaller volumes of buying to push the stock’s price up more easily. Since the share price suddenly rises, short-sellers need to purchase the stock to close out their short positions. This rapid buying and closing of short positions produces an unusually low level of supply that causes the price of the stock to rise rapidly. This type of short squeeze was the result of the first meme stock craze regarding GameStop.
Besides GameStop – the ur-meme stock – there have been a number of other meme stocks. Two of the most popular are AMC Entertainment and Bed Bath & Beyond. AMC CEO Adam Aron used the popularity of AMC shares among the retail class to effect a secondary offering that raised enough money to stave off bankruptcy during the 2020-2021 pandemic. Bed Bath & Beyond saw a flurry of volatile trading but eventually went bankrupt in April 2023.
GameStop & AMC stock charts
GameStop stock has already lifted momentarily above former resistance circa November 2021 surrounding $63. That break tells us that there’s a very real chance that bulls make it to the next point of possibility in the $86 to $87 range.
Support, if there is any, looks to be somewhere in the high $40s based on previous upward lunges during the Spring and Summer of 2022.
GME daily stock chart
AMC stock has formed a new range high on Tuesday with a push above the $11.17 high from October and November of last year. Above there is a demand window ranging from $13.50 to $13.90.
Then there are the two sides of the gap down from August 2023 at $16.60 and $19.40. Without any fundamental reasons for buying other than memes, expect bulls to target several of these levels.
AMC daily stock chart
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD sticks to half-yearly highs of 0.6740 ahead of US NFP
AUD/USD consolidates near a multi-month peak at 0.6740 in the Asian session on Friday as traders keenly await the the US NFP report. The Fed-RBA policy divergence continues to underpin the pair.
USD/JPY falls hard toward 160.50, US NFP data awaited
USD/JPY is falling hard toward 160.50 in Asian trading on Friday, having reversed from near 161.40. The pair drops on renewed US Dollar weakness and Japanese verbal intervention, which rescues the Yen. The focus shifts to US jobs report.
Gold price steadily climbs back closer to two-week high, focus remains glued to US NFP
Gold price extends its consolidative price move during the Asian session on Friday and remains well within the striking distance of the highest level since June 21 touched earlier this week. The recent softer US macro data reaffirmed market bets that the Federal Reserve will begin cutting rates in September.
Is the party over for meme coins?
According to Santiment's data on Thursday, meme coins have experienced steep declines in the past few weeks, following speculation that the crypto market has passed its euphoria phase.
US jobs report preview – Will Nonfarm Payrolls disappoint?
Will the July Nonfarm Payrolls report disappoint, sending stocks and the US Dollar lower? Let's take a look at what the signal is from the other labor market indicators because forex fundamentals matter for trading.