GameStop stock and AMC shares led another rally for meme stocks Tuesday. Shares soared Monday after Keith Gill, who sparked the meme stock rally during the pandemic, made his return to social media for the first time in three years. The New York Stock Exchange temporarily paused trading on GME stock multiple times early Monday as shares careened higher.
Gill, known by his social media name Roaring Kitty, on Sunday night posted on social media platform X for the first time since June 2021. The post was an image of a meme implying he is "getting serious."
Gill rose to infamy in 2020 and 2021 as one of the key drivers for the GameStop short squeeze. The former financial broker and analyst was eventually called to testify in front of the House Financial Services Committee in February 2021 regarding a probe on potential market manipulation.
Retail investors celebrated with comments like "he's back," and "game on," or "just in time for the memecoin supercycle," in a reference to rising prices for smaller cryptocurrencies.
GME stock leapt 60.1% Tuesday after bolting 125% during premarket trade. GameStop vaulted more than 74% Monday following Gill's post. The NYSE briefly paused trading on GME stock multiple times on Monday and Tuesday due to volatility.
GameStop is now up 178% in 2024. Shares were essentially flat on the year through Friday, closing at 17.46.
Theater chain AMC Entertainment leapt about 32% Tuesday after spiking as much as 121% at the open. The NYSE also halted trading on AMC stock on Tuesday. Shares rallied 78.4% Monday. AMC stock now has an 11.9% gain on the year through Tuesday. Prior to the week's gains, shares were not too far off their record low of 2.38 from April.
Previous Short Squeeze
Shares of GME stock surged 688% in 2021. Individual investors coordinated a buying spree in the video-game retailer's shares using online message boards. The buying surge caught by surprise the short sellers who were betting the stock would fall. These "shorts" faced unlimited losses unless they bought the stock, further fueling gains.
It was an innovative and controversial way to push GME stock higher.
GME stock ironically went up because it fell so much. And a large share of investors thought it would fall more.
Coming into 2021, GME shares had lost a third of their value over the previous five years. Investors betting the stock would fall, the shorts, controlled GME stock shares in late 2019. That overly bearish bet set up a perfect environment for a massive short-squeeze rally.
The entire short squeeze saga was detailed in the movie "Dumb Money."
You can follow Harrison Miller for more stock news and updates on Twitter @IBD_Harrison
