Shares of GameStop, the video game retailer, and AMC, the theater chain, saw a significant decline late in the week as the meme stock surge initiated by the return of “Roaring Kitty” lost momentum.
GameStop’s stock plummeted by 30 percent, closing at $27.67 after previously reaching up to $64.83, and AMC’s stock dropped by 15.3 percent, according to a report by Reuters.
“The short sellers three years ago were completely surprised by the magnitude of the mass purchases and ultimately overwhelmed by the size of the short squeeze,” said Rick Meckler, partner at Cherry Lane Investments. “They have likely learned from that experience and left themselves less exposed, thereby reducing the potential for extended upward pressure,” Meckler added.
GameStop shares soared over 70 percent on Monday after Keith Gill, the individual behind the YouTube channel Roaring Kitty, who led the 2021 campaign against institutional investors betting against GameStop, posted on his X/Twitter account for the first time since June 2021.
On Sunday night, Gill shared a photo of a man leaning forward in a gaming chair — a meme that suggests reengagement or increased focus — without any additional explanation.
However, since Gill’s post, both GameStop and AMC’s shares have significantly decreased.
According to Vanda Research, which tracks retail investor flows, institutional investors were also part of the meme stock craze this time, a change from 2021.
Short sellers, who bet on a stock’s decline, faced unrealized losses worth $1.14 billion this week, according to analytics firm Ortex Technologies. Meanwhile, the hedge fund Renaissance Technologies had bet that GameStop shares would continue to rise.
Overall, GameStop’s stock has fallen more than 70 percent from its 2021 peak, and AMC has dropped 99 percent from its highest point, Reuters noted.
