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GameStop, AMC shares surge again, Bill Gross says ''Gamestonk' is passe'

Published 05/13/2024, 08:34 PM
Updated 05/14/2024, 11:03 AM
© Reuters.
- GameStop and AMC rose in early U.S. trade on Tuesday as a rally in so-called meme stocks spilled over into second day, after a key figure in their 2021 rally re-emerged after an extended break on social media. 

GameStop (NYSE:GME) and AMC Entertainment (NYSE:AMC) both soared more than 50%, piling on to gains of 74% and 80%, respectively, on Monday.

Bill Gross, renowned investor and fund manager, commented on the social media platform X:

"“Gamestonk” is passe. What could be a better buy signal than a cartoon man sitting upright in his chair?"

"Buy? Sell? Not me. Sell 400% annualized volatility," he wrote.

Other stocks, including the U.S. shares of BlackBerry (NYSE:BB) and headphone maker Koss Corporation (NASDAQ:KOSS), surged. Reddit (NYSE:RDDT), which had fostered a bulk of the 2021 meme stock frenzy on its Wallstreetbets forum, gained, as did Robinhood Markets (NASDAQ:HOOD), which reported bumper retail trading volumes during the craze. 

The spike in stock prices had little to do with the fundamentals of the companies, and came after Keith Gill, who goes by the social media monikers "RoaringKitty" and "DeepF***ingvalue", posted a series of cryptic images and gifs on the social media platform X. They were the first posts from the account in nearly three years, and did not mention GameStop. 

The posts included clips from movies including Pirates of the Caribbean, Tombstone, V For Vendetta, and a comic of a man sitting up in a chair. The image, which was the first of Gill’s new posts, is used to convey the message that things are getting serious. 

In 2021, Gill’s posts on Reddit, particularly regarding Gamestop and the overwhelming amount of short positions against the stock, spurred a flurry of retail buying into the video game retailer.

Buying then spilled over into other stocks with relatively weak fundamentals and high short positions. This, in turn, spawned the idea of meme stocks -- shares which move largely based on social media sentiment, rather than the actual fundamentals of the company.

“Retail traders are rejoicing with the return of Roaring Kitty," Joe Vezzani, CEO of LunarCrush, said.

"This could be the catalyst the markets are looking for to break through the inflation and interest rate noise, giving the everyday investor something to rally around. In a world that trades narratives, the return of Roaring Kitty is bullish for small caps and crypto.” 

But despite Monday’s gains, Gamestop, AMC and the other meme stocks remained well below peaks hit during 2021. Gamestop was trading at about $49.58 a share as of 09:46 ET (13:46 GMT) -- a fraction of the $120 hit in early-2021. 

Ambar Warrick and Scott Kanowsky contributed to this report.

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