ETFs
Gaming ETFs Rise in Stock Race Gamestop Meme
Gamestop Showcase – Meme Stock
The craze for Gamestop stock returned Monday, boosting a handful of gaming and retail ETFs, as shares of GME more than doubled at one point after comments from two popular social media personalities.
The rise in GME helped boost gaming and retail exchange-traded funds by up to 8%, led by Yield Max Ultra Option Income Strategy ETF (ULTY), which has the largest exposure to GME stock, at 6% of assets. Other ETFs that have benefited from the rise in GME include Amplify Video Game Technology ETF (GAMR) and the SPDR S&P Retail ETF (XRT)both up 4% Monday morning.
Gamestop’s business was stopped temporarily as prices rose. It jumped 69% to $29.50 in early afternoon trading.
The trading frenzy began before markets opened as “Roaring Kitty”, a key player in the infamous 2021 short squeeze, returned from a three-year hiatus on Sunday, post an image on of a player leaning intensely forward.
Popular and controversial social media personality Andrew Tate added to the morning buzz by tweeting the message, “Buy $1,000,000 from Gamestop? » to his 9 million followers on X.
Are Meme Stocks Making a Comeback?
The meme stock craze was a unique event in early 2021 that involved a surge in the price of stocks, such as GameStop (GME) And AMC Entertainment (AMC)driven primarily by a large group of individual investors, often communicating and coordinating through online forums like Reddit.
In 2021, hedge funds heavily shorted GME shares, betting that their price would fall. However, an increase in purchases by retail investors caused a short squeeze. As the price rose, short sellers were forced to buy back shares to cover their positions, causing the price to rise further in a rapid snowball effect.
AMC stock also rose 33% in morning trading, increasing speculation that the meme stock craze is returning.
There are 43 ETFs that hold AMC stockbut none are heavily exposed, as the ETF with the highest AMC allocation, the Invesco Dynamic Entertainment and Leisure ETF (PEJ) holds a modest position, less than 2% of assets.
Permanent link | © Copyright 2024 etf.com. All rights reserved