GameStop and AMC Stocks Plunge Over 25% Amid Meme Stock Fading Rally

GameStop (GME) and AMC stocks took a hit on Wednesday, with both plunging more than 25% after a two-day surge. The meme stock rally that had investors buzzing seemed to be losing steam, as other heavily shorted stocks like SunPower (SPWR), Beyond Meat (BYND), and the Children’s Place (PLCE) also saw declines.

The recent trading action brought back memories of the 2021 meme stock frenzy, when GameStop shares skyrocketed by 180% in just two days. The return of Keith Gill, also known as “Roaring Kitty,” who was at the center of the meme stock craze last year, added fuel to the fire.

Despite the losses suffered by short sellers during the original meme stock rally, data from S3 Partners showed that short interest in GameStop remained high at almost 24% of the float. This led to significant losses for short sellers, with GameStop shorts down $1.36 billion on Tuesday alone.

While some Wall Street strategists warned that the recent enthusiasm may not reach the levels of the 2021 madness, others like YouTuber Matt Kohrs believe that the battle between the “little guy versus the big guy” is still relevant today. The perception that the system benefits the powerful elite has fueled the populist movement symbolized by GameStop.

As the meme stock saga continues to unfold, investors are keeping a close eye on how the market will react in the coming days. Stay tuned for more updates on this evolving story.