Retail favorites GameStop and AMC continued their decline in premarket trading on Thursday as the excitement over the return of “Roaring Kitty,” the central figure in the 2021 meme stock rally, diminishes.
Shares of the struggling video game retailer GameStop fell 14% to $34, after having jumped to as high as $64.83 earlier this week, resulting in $1 billion in losses for short sellers, according to Ortex Technologies. Theater chain AMC dropped 12% following an 88% gain since Friday’s close.
Despite Wednesday’s losses, the two companies remained among the top three most-traded shares by retail investors during the session, as per data from J.P. Morgan, a position they have held every day this week.
The sharp rise in the shares began following a series of posts from Keith Gill’s X account “Roaring Kitty,” whose bullish posts on GameStop were a catalyst for the 2021 meme stocks frenzy.
Unlike in 2021, when Reddit users banded together to target highly shorted stocks, causing significant losses for bearish hedge funds, this time, institutional investors also participated in the meme stock activity, according to Vanda Research, which tracks retail investor flows.
“There’s more use of social media and professional investors know this, they’re tracking this, and they’re trying to take advantage of this,” said Ben Laidler, global markets strategist at digital brokerage eToro.
“Even though there are more retail investors today, you’re not seeing that follow through into the rally this time as you saw last time. Retail investors are once bitten twice shy after they ended up losing a lot of money last time round.”
GameStop stock is still nearly 70% below its 2021 peak, while AMC, which hit a record low last month, remains 98% off its all-time high.
Since his first post on Sunday, Gill has shared dozens of cryptic movie clips daily on X.com.
Former U.S. SEC Chair Jay Clayton told on Wednesday that the posts have triggered “a wave of euphoric and speculative buying in the retail (trading) community, which is never a good thing,” adding that it is not illegal to say, “I like a stock.”
Retail purchases of GameStop eased to $5.7 million in the previous session from $15.9 million on Tuesday, which was the highest this year, according to Vanda data.
Similarly, for AMC, daily retail inflows dropped to $7.7 million on Wednesday from $51 million the previous day.
