GameStop stock surges over 60% as meme-stock market makes a strong comeback

GameStop stock (GME) experienced a significant surge on Tuesday, rising over 60% and adding to the rally that saw shares of the video game retailer climb 74% on Monday. This sudden increase follows the return of Keith Gill, also known as “Roaring Kitty,” whose bullish stance on GameStop sparked the meme stock frenzy in 2021.

Prior to Monday’s rally, GameStop shares had been relatively flat year to date but had seen a 60% increase in the past month. The stock has now surged over 180% in the last month, excluding Tuesday’s premarket gains. The upward momentum in GameStop was mirrored by theater chain operator AMC, whose stock rose over 100% on Tuesday before retracting some gains. AMC also revealed in an SEC filing that it issued approximately 72.5 million new shares, raising around $250 million for the company.

Other heavily shorted stocks like SunPower, Beyond Meat, and The Children’s Place also saw significant gains in premarket trading on Tuesday. The recent trading activity has drawn comparisons to the meme stock frenzy of early 2021, with Nicholas Colas of DataTrek Research noting similarities in the aggressive price movements.

Despite the losses suffered by short sellers during the previous meme stock rally, short interest in GameStop remains high, with 24% of the float sold short as of Monday. Ihor Dusaniwsky of S3 Partners reported that GameStop shorts had incurred over $1.3 billion in losses in May following Monday’s rally.

The resurgence of meme stocks like GameStop and AMC has reignited the debate between retail traders and institutional investors. While some view these rallies as a symbol of the little guy challenging the establishment, others caution against the risks associated with such volatile trading behavior. The ongoing saga of meme stocks continues to captivate the financial markets, with all eyes on how this latest chapter will unfold.