GameStop Corp. (NYSE:GME) experienced a substantial increase, rising over 60% on Tuesday, adding to a significant 74% surge on Monday. This dramatic rally was sparked by the reappearance of Keith Gill, known as “Roaring Kitty,” who played a central role in the meme stock phenomenon of 2021. Before Monday, GameStop shares had been relatively flat year-to-date but had seen a 60% increase over the past month. With these recent gains, GameStop’s stock is now up over 180% in the last month, excluding Tuesday’s premarket rise.
The surge in GameStop’s shares was accompanied by a similar rally in AMC Entertainment Holdings Inc. (NYSE:AMC), which saw its stock climb more than 100% on Tuesday before reducing some of those gains. AMC also announced the issuance of approximately 72.5 million new shares in an SEC filing, raising about $250 million.
Other stocks experiencing notable premarket increases included SunPower Corp. (NASDAQ:SPWR), up 90%; Beyond Meat Inc. (NASDAQ:BYND), which climbed 25%; and The Children’s Place Inc. (NASDAQ:PLCE), which saw an increase of around 6%.
Nicholas Colas from DataTrek Research commented that the current market activity mirrors the early 2021 scenario, which initiated a major short squeeze in GameStop, propelling the stock up 1,500% in January of that year. Despite the severe losses from that period, short interest in GameStop remains high, with 24% of the float sold short as of Monday, according to data from S3 Partners.
Ihor Dusaniwsky, managing director of S3 Partners, revealed to Yahoo Finance that short sellers of GameStop had incurred over $1.3 billion in losses for May, exacerbated by Monday’s rally. Colas noted that traders shorting a stock during such aggressive rallies are often forced to close their positions at any cost, fearing a repeat of 2021’s trading frenzy.
This resurgence of meme stocks has reignited discussions about the dynamics of retail versus institutional trading. YouTuber Matt Kohrs, who previously invested in GameStop and AMC, remarked that the struggle between “the little guy and the big guy” still defines today’s market rallies, symbolizing a populist movement against the established financial elite. Kohrs also noted a shift in sentiment, attributing it to people no longer being confined indoors as they were during the pandemic.
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