GameStop, AMC Shares Soar as Traders Pounce on Meme Stocks
(Bloomberg) -- Meme-stock traders again piled into shares of GameStop Corp. and AMC Entertainment Holdings Inc. in a revival of the retail-trading frenzy that rocked markets during the pandemic.
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The video-game retailer’s stock jumped 60% after rising as much as 113% earlier on Tuesday, while the beleaguered movie theater chain’s shares were up 32%. The swings triggered multiple halts in the trading of each stock throughout the day. GameStop has picked up more than $11 billion in market value this month as its stock has soared, while AMC has gained some $1.2 billion.
The latest rally erupted on Monday following the return to social media of Keith Gill, who drove the meme-stock mania of 2021 under the moniker “Roaring Kitty.” Gill shot to fame that year by rallying day traders on Reddit in an effort to squeeze GameStop short sellers.
AMC on Tuesday announced it had completed a previously announced at-the-market offering of shares, raising about $250 million in total as it sold 72.5 million shares for an average price of $3.45. AMC’s stock closed at $6.85 on Tuesday.
“I think it shaped up pretty good for everybody here,” said Tuttle Capital Management Chief Executive Officer Matthew Tuttle. “They did what they needed to do, and the shareholders didn’t get wiped out.”
AMC’s bonds got a big boost from the stock rally, too. Its notes were the biggest gainers in high-yield trading on Tuesday, with its 10% bond due 2026 rising as much as 11.25 cents on the dollar to 87 cents, according to Trace pricing data.
Both stocks rallied more than 70% on Monday as GameStop option volume surged to the highest level since July 2022. By Tuesday morning, GameStop had blown through the most-traded strikes, and traders continued to pump options volumes well above the average over the past month.
Even so, the activity falls far short of the 2021 flurry. The number of GameStop call options that traded hands on Monday was just 10% of the volume that moved at the peak of the meme stock craze three years ago.
Read More: GameStop Stock Surge Is a Long Way From 2021’s Meme-Stock Frenzy
“GameStop ranked as the second-most traded stock by retail investors for out of the money call option volumes on Monday,” said Giacomo Pierantoni, head of data at Vanda Research.
Trading volume has soared this week for both of the stocks, with hundreds of millions of shares exchanging hands over the past two days. However, the value of shares trading hands for both stocks remained far below the levels seen three years ago.
Even with the rapid rallies — GameStop’s stock price has more than quadrupled this month, and AMC’s has tripled — each remains below the heights they reached during the 2021 meme-stock heyday.
Traders quickly looked to stocks beyond GameStop and AMC that could move in sympathy, lifting a large swath of names with high short interest on Monday. That trend continued on Tuesday as SunPower Corp. shares jumped by a record, while BlackBerry Ltd., Lucid Group Inc. and Virgin Galactic Holdings Inc. also rallied.
While the surge during the height of the pandemic included a staunch commitment by retail traders to “hodl” — or hold on for dear life — they’re now more experienced, Tuttle said.
“The people trading this stuff now are a lot more seasoned and understand where to get in generally speaking and where to get out,” he said.
--With assistance from Carly Wanna, Jeremy Hill, Bailey Lipschultz and Michael Msika.
(Updates throughout for stock market’s close.)
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