A GameStop store opens at a mall in Chicago on March 16, 2023.
Scott Olson | Getty Images
GameStop And AMC Stocks fell in premarket trading Wednesday as frenzied trading in meme stocks showed signs of abating.
Shares of the brick-and-mortar video game retailer fell 13% in premarket trading, while shares of the movie theater chain fell 12%. Through Wednesday, shares of GameStop and AMC were up 179% and 135%, respectively, this week.
AMC Entertainment
The sell-off in AMC shares occurred after the firm announced a debt-for-equity swap. AMC will issue 23.3 million shares in exchange for $163.9 million in bonds due 2026. The company also completed a $250 million stock sale on Monday.
Both meme stars experienced stunning gains and explosive trading volumes earlier in the week, but retail interest appears to have been much smaller and short-lived this time around. In terms of sheer retailer influx, it pales in comparison to the epic mania of three years ago.
For example, net inflows from retail traders on Monday were more than $15.8 million and $37.5 million, respectively, data from Vanda Research shows. But that is dwarfed by peak daily inflows of about $87.5 million for GameStop and $170 million for AMC, which were seen in late January 2021.
GameStop
The speculative wave reignited on Monday thanks to a rare post on social media. update from “Roaring Kitty” The man, whose legal name is Keith Gill, posted a photo on social media platform X of a video gamer sitting forward in a chair, a meme used by gamers to show that they take the game seriously.
Gill, also known as DeepF——Value on Reddit, is former marketer for Massachusetts Mutual Life Insurance who previously led many of the day traders who came to GameStop back in 2021.
The return of the meme stock phenomenon sent shares of GameStop and AMC up more than 70% on Monday, with shares continuing higher on Tuesday. The enthusiasm seemed to fade towards the end of the previous session.
Smead Capital Management CEO Cole Smead called the stock meme craze “downright stupid,” saying it was “gambling” on CNBC’s “Street Signs Europe.”
— CNBC’s Alex Harring contributed reporting.