Shares of GameStop and AMC Entertainment tumbled on Wednesday after a two-day rally sparked by the return of ‘Roaring Kitty’ Keith Gill.
In 2021, Gill was the central figure in meme stock frenzy.
Meme stocks refer to certain company shares that have been boosted by retail investors using trading platforms and social media investment advice.
ALSO READ: Wall Street today: US stocks surge after inflation data
Videogame retailer GameStop shed nearly 30 per cent, nearly half of its gains in the past two sessions, while cinema chain AMC fell 25 per cent after surging 135 per cent in the same period.
In an exchange filing, AMC said it will issue nearly 23.3 million shares of its stock to exchange for $163.9 million in debt that it owes.
Trading in the retail investor darlings were halted multiple times after the market opened, with investors exchanging more than $2.3 billion worth of GameStop shares.
On Tuesday, ‘Roaring Kitty’ shared a clip from the movie ‘Braveheart’ on X (formerly twitter) with the word ‘GameStop’ flashing on the screen, as Mel Gibson, playing William Wallace, screams “freedom”.
It is the first time that Gill named a company after his return to X following a three-year gap.
ALSO READ: Explainer: Why are meme stocks on Wall Street rallying again?
In 2021, Gill’s YouTube streams and a string of posts on Reddit had helped attract a flood of retail cash into GameStop.
In Gill’s 2021 testimony to Congress, he denied the notion that he used social media to profit by promoting GameStop to unwitting investors.
On Tuesday, AMC and GameStop were among the top 10 securities bought by retail investors.
US stocks
US stock indices gained on Wednesday after a lower-than-expected increase in consumer prices.
At 11:20 a.m. ET, the Dow Jones Industrial Average was up 261.81 points, or 0.66 per cent, at 39,819.92, the S&P 500 was up 44.95 points, or 0.86 per cent, at 5,291.63, and the Nasdaq Composite was up 160.59 points, or 0.97 per cent, at 16,671.77.
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Published: 15 May 2024, 10:58 PM IST