GameStop and AMC shares rose as traders pounced on Meme shares

(Bloomberg) — Meme stock traders once again piled into GameStop Corp. shares. and AMC Entertainment Holdings Inc. Reviving the retail craze that shook markets during the pandemic.

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The video game retailer jumped as much as 113% on Tuesday, while the beleaguered movie theater chain rose 129% — triggering multiple halts in trading for both throughout the morning. GameStop gained about $12 billion in market cap this month as its shares rose, while AMC gained about $2 billion.

The latest demonstration erupted on Monday following the return to social media of Keith Gill, who spearheaded 2021's meme mania under the moniker “Roaring Kitty.” Gill rose to fame that year by rallying day traders on Reddit in an attempt to pressure GameStop short sellers.

On Tuesday morning, AMC announced that it had completed a previously announced stock offering, raising about $250 million in total as it sold 72.5 million shares at an average price of $3.45. AMC traded as high as $11.88 on Tuesday.

“I think it's been good for everyone here,” said Matthew Tuttle, CEO of Tuttle Capital Management. “They did what they had to do, and shareholders were not wiped out.”

AMC bonds got a big boost from rising stocks as well. Its bonds were the biggest gainers in high-yield trading on Tuesday, with its 10% notes due 2026 rising as much as 11.25 cents on the dollar to 87 cents, according to Trace pricing data.

Both stocks rose more than 70% on Monday as options volume rose to the highest level since July 2022. By Tuesday morning, GameStop had surpassed its most heavily traded strikes, and traders continued to pump options volumes well above average over the past. Month.

However, the activity is well below the wave of 2021. The number of GameStop call options traded Monday was just 10% of the volume that moved at the height of the meme stock craze three years ago.

Read More: GameStop Stock Rally Is a Long Way From 2021's Meme-Stock Madness

“GameStop ranked as the second most actively traded stock by retail investors in terms of call option volumes on Monday,” said Giacomo Pirantoni, head of data at Vanda Research.

Trading volume has been up this week for both stocks, with hundreds of millions of shares of each stock changing hands over the past two days. However, the trading value of both stocks is still well below levels seen three years ago.

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Even with the rapid rises — GameStop's stock price has nearly quintupled this month, and AMC's has tripled — both remain below the heights they reached during the peak of meme stocks in 2021.

GameStop pared its gains to 61% as of 11:43 a.m. New York time, while AMC rose 67%.

Traders quickly looked to stocks outside of GameStop and AMC that could move sympathetically, lifting a raft of names with high short interest on Monday. The trend continued Tuesday as shares of SunPower Corp. jumped by a record, while BlackBerry Ltd. also rose. and Lucid Group Inc. and Virgin Galactic Holdings Inc.

While the rally during the height of the pandemic included a strong commitment by retailers to “hold” — or hold on for dear life — they are now more experienced, Tuttle said.

“The people who trade these things now are much more experienced and generally understand where to get in and where to get out,” he said.

–With assistance from Carly Wanna, Jeremy Hill, Billy Lipschultz, and Michael Messika.

(To add bond movements, latest stock trades, charts, and data on market value and trading volume.)

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