Meme stocks including GameStop Corporation GME and AMC Entertainment Holdings AMC soared earlier this week on increased optimism led by the social media return of Keith Gill, aka Roaring Kitty.
But shares are under pressure on Wednesday and the rally could prove to be short lived.
GameStop, AMC Fall: After seeing strong gains on Monday and Tuesday, GameStop and AMC are each down over 20% on Wednesday.
AMC shares could be reacting to news that the company issued stock in exchange for notes and completed an at-the-market equity offering earlier in the week.
For GameStop, the fall could be due to investors taking profits after the stock soared, or it could mark the end of a rally that began when Roaring Kitty shared a meme on X, formerly known as Twitter, on Sunday and followed up with a series of videos throughout the week.
On Monday, GameStop shares opened for trading at $26.34 and closed at $30.45. The shares traded between $24.77 and $38.20 during the day, hitting new 52-week highs.
On Tuesday, GameStop shares opened for trading at $64.83 and closed at $48.75. The shares traded between $36.00 and $64.83 during the day, hitting new 52-week highs.
On Wednesday, the stock told a different story. GameStop opened for trading at $40.31 and has been falling ever since, experiencing several volatility halts to the downside during the trading session.
AMC had a similar path with its share price. AMC stock opened for trading at $3.52 on Monday and closed at $5.19. The stock went on to trade as high as $11.88 on Tuesday. AMC stock opened for trading at $6.10 on Wednesday and is currently down over 20% at the time of writing.
While both GameStop and AMC stock trade higher than they did to start the week, the downward move could signal the rally losing steam.
In January 2021, the rally of meme stocks lasted several weeks. The rally likely ended more from the intervention of brokerages and actions taken by Congress rather than investors losing interest.
Related Link: GameStop Option Traders Active Before Roaring Kitty’s Tweets, Might Have Made Millions
Roaring Kitty Mystery: The return of Roaring Kitty on social media sparked the current rally and could be a determining factor in how long the current rally lasts.
After sharing a meme on Sunday, the social media account posted videos featuring clips from movies on X on Monday and Tuesday. The videos were spaced out in 30 minute intervals for hours during the trading session.
On Tuesday, a video was shared at night with a movie clip from "Braveheart," featuring Mel Gibson's character. In the video another character says "The prisoner wishes to say a word," before Gibson's character yells out an elongated "Freedom." On the screen reads and elongated "Gamestop" during the clip.
Wednesday's movie clips from the Roaring Kitty account have been spaced out every 15 minutes.
No one knows exactly what this means or if the videos could be a countdown to something, as the intervals between releases shorten..
While the videos are likely coming from Gill, there also has been no proof that it is still the original Roaring Kitty behind the account with no words shared, no videos of himself and no videos on YouTube, like he previously did in 2021.
GME, AMC Price Action: GameStop shares are down 32% to $33.33 at the time of writing Wednesday.
AMC shares are down 25% to $5.13 at the time of writing Wednesday.
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