It appears that retail investors have once again renewed the rally in meme stock favourites, including GameStop and AMC Entertainment.
The latter’s shares jumped nearly 10% Thursday morning, marking the fourth day of gains for the heavily-shorted company. AMC recently surpassed a significant milestone, raising over $1 billion in financing in an effort to evade bankruptcy over the past several months. This has put the company’s market value at nearly $10 billion, as the stock is up by more than 850% since the beginning of the year.
In fact, since the movie theatre company reported its first quarter earnings on May 6, its stock has nearly doubled, increasing its value by almost $6 billion, “The Reddit crowd is strong, the volumes have been off the charts lately, so there’s clearly demand that wasn’t there pre-Covid,” Macquarie Securities analyst Chad Beynon told Bloomberg. However, the latest rally in AMC shares has also caused over $1.37 billion in market-to-market losses for short-sellers, including a loss of $290 million stemming from Wednesday’s rally.
Sponsored · Silver47 Exploration Inc.
Similarly, GameStop has also been relishing in the latest retail investor frenzy. Shares of GameStop soared over 15% to above $240 on Thursday, marking the highest level since the middle of March. This has forced some bearish short-sellers to retreat their positions, as they hurried to buy shares to cover their losses. Over the past week, approximately 958,000 GameStop shares, valued at $201 million, were purchased to cover short sales. Since the beginning of the year, GameStop short-sellers have lost a combined $6.7 billion in mark-to-market losses.
Some analysts have attributed the recent resurgence in GameStop to growing speculation that the video game retailer may be in the midst of creating a non-fungible token (NFT) platform. The latest NFT hypothesis came to light after website nft.gamestop.com posted positions for engineers, designers, and a variety of other jobs.
Information for this briefing was found via Bloomberg and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
