GameStop (GME) and AMC Entertainment (AMC) headline a major meme stock rally. Short sellers lose nearly $5 billion on GME and AMC as Roaring Kitty's social media return sparks trading frenzy.
In a spectacular turn of events similar to the 2021 trading frenzy, meme stocks have recaptured the financial world's attention. GameStop (GME) and AMC Entertainment (AMC) lead the charge, with both stocks posting significant gains and causing substantial losses for short sellers.
GameStop, the video games retailer that has become a face of memes stock mania, saw its share price soar. According to CNBC, during Monday's surge, short sellers who bet against the company's success lost an astounding $838 million in the stock market. This development comes after GameStop's "squeeze score" hit a perfect 100/100, signaling a high short squeeze risk.
AMC Entertainment was not left behind at the latest rally. After selling 72.5 million shares, the cinema chain announced it successfully raised $250 million in capital. Despite the good news, Citi's financial analysts remain cautious, raising their price target for AMC to $3.20, although they still consider the stock overvalued.
The return to social media of Keith Gill, better known as the Roaring Kitty, led to a frenzy among retail investors. His posting, which hinted at importance, triggered a surge in GME's and AMC's shares as investors cheered his iconic status.
As a result of a matched effort by individual investors on the internet message boards, the 2021 short squeeze saw GME's shares surge by 688%. Short sellers were surprised by this innovative and controversial strategy, leading to a massive rally.
GME's stocks shot up about 98% by early Tuesday morning, and AMC shares jumped roughly 121% at the start of trading. Other meme stocks, such as KOSS (KOSS), Virgin Galactic (SPCE), and BlackBerry (BB), have also shown early gains, indicating a broader rally in memes.
