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GameStop, AMC Shares Soar as Traders Attack Meme Stocks
(Bloomberg) — Meme stock traders again invested in GameStop Corp shares. and AMC Entertainment Holdings Inc., in a revival of the retail trading frenzy that roiled markets during the pandemic.
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The video game retailer jumped 113% on Tuesday, while the beleaguered movie theater chain rose 129% – triggering multiple trading halts for both throughout the morning. GameStop gained about $12 billion in market value this month as its shares soared, while AMC gained about $2 billion.
The latest rally broke out on Monday following the return to social media of Keith Gill, who fueled the 2021 meme stock craze under the nickname “Roaring Kitty.” Gill rose to fame that year by rallying day traders on Reddit in an effort to squeeze GameStop short sellers.
On Tuesday morning, AMC announced that it had completed a previously announced at-the-market offering, raising about $250 million in total by selling 72.5 million shares for an average price of $3.45. . AMC traded at $11.88 on Tuesday.
“I think it’s all been really good for everyone here,” said Tuttle Capital Management CEO Matthew Tuttle. “They did what they needed to do and the shareholders didn’t get wiped out.”
AMC bonds also got a big boost from the stock rally. 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 price data.
Both stocks rose more than 70% on Monday as options volume reached the highest level since July 2022. By Tuesday morning, GameStop had surpassed the most traded strikes, and traders continued pumping volumes of options well above the past average. month.
Still, the activity falls far short of the buzz of 2021. The number of GameStop call options traded on Monday was just 10% of the volume traded at the height of the meme stock craze three years ago.
Read more: GameStop’s Stock Surge Is a Far Far From 2021’s Meme Stock Frenzy
“GameStop ranked as the second most traded stock by retail investors in 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 stocks, with hundreds of millions of shares trading in each stock over the past two days. However, the value of shares traded in both stocks remains well below levels seen three years ago.
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Even with the rapid rallies — GameStop’s share price has nearly quintupled this month and AMC’s has tripled — each remains below the highs they reached during the meme stocks’ heyday of 2021.
GameStop trimmed gains to 61% as of 11:43 a.m. New York time, while AMC was up 67%.
Traders quickly looked for stocks beyond GameStop and AMC that could move in sympathy, lifting a wide range of names with high short interest on Monday. That trend continued on Tuesday when shares of SunPower Corp. jumped record highs, while BlackBerry Ltd., Lucid Group Inc. and Virgin Galactic Holdings Inc.
While the surge during the height of the pandemic included a firm commitment from retail traders to “hodl” – or hold on for dear life – they are now more savvy, Tuttle said.
“The people who trade these things now are much more experienced and understand where to get in and where to get out,” he said.
–With assistance from Carly Wanna, Jeremy Hill, Bailey Lipschultz and Michael Msika.
(Adds security movements, latest stock trades, chart and data on market capitalization and trading volume.)
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