Retail favorites GameStop (GME.N) and AMC (AMC.N) continued their decline in premarket trading on Thursday, as the excitement surrounding the resurgence of “Roaring Kitty,” a central figure in the 2021 meme stock frenzy, fades away.
GameStop shares tumbled 14% to $34 after spiking to as high as $64.83 earlier in the week, resulting in $1 billion in losses for short sellers, according to Ortex Technologies. AMC, the theater chain, dropped 12% following an 88% surge since Friday’s closing.
Despite Wednesday’s losses, both companies remained among the top three most-traded stocks by retail investors during the session, as per data from J.P. Morgan, a trend observed throughout the week.
The sharp rise in share prices began after a series of posts from Keith Gill’s X account, “Roaring Kitty,” known for his bullish stance on GameStop during the 2021 meme stock frenzy.
However, unlike in 2021 when Reddit users collaborated to target heavily shorted stocks, this time institutional investors were also involved in the meme stock craze, according to Vanda Research, which tracks retail investor flows.
“There’s increased use of social media, and professional investors are aware of this and are monitoring it, attempting to capitalize on it,” said Ben Laidler, global markets strategist at digital brokerage eToro.
“Although there are more retail investors today, we’re not witnessing the same rally momentum this time around as we did last time. Retail investors are more cautious after experiencing significant losses previously.”
GameStop’s stock still remained nearly 70% below its 2021 peak, while AMC, which hit a record low last month, was down 98% from its all-time high.
Since his initial post on Sunday, Gill has been posting numerous cryptic movie clips daily on X.com. He did not respond to a Reuters request for comment regarding the meaning of the posts and whether he intends to make his investments public again.
Former U.S. SEC Chair Jay Clayton stated on CNBC Wednesday that these posts have triggered “a wave of euphoric and speculative buying in the retail trading community, which is never a good thing,” although he noted that expressing a preference for a stock is not illegal.
Retail purchases of GameStop decreased to $5.7 million in the previous session from $15.9 million on Tuesday, the highest figure 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.
Other heavily shorted stocks that experienced increased demand earlier this week also declined on Thursday. Tupperware (TUP.N) dropped 5% to $1.71, while U.S.-listed BlackBerry fell 4.6%. Koss Corp (KOSS.O) slid 8% to $4.57.
GameStop and AMC were among the top ten securities with the highest options volume on Wednesday, with the majority of traders purchasing call options, which speculate on a stock’s rise, according to data from Options Clearing Corp.
