A screen displays the Gamestop logo and trading information on the floor of the New York Stock Exchange (NYSE) on March 29, 2022.
Brendon McDermide | Reuters
Shares of two meme stocks rose on Thursday, adding to an unexpected bullish line for a stock market that has been down in choppy trading for more than a month.
GameStop has jumped more than 30% and has been stopped more than once for instability. Theater chain AMC Entertainment’s stock has popped up more than 20%.
Gamestop and AMC turned their heads early last year when a band of retail investors coordinated trading in online chatrooms to create a massive short-term pressure on these stocks, which are widely hated by hedge funds and other players. Meteor assemblies have caused huge inconvenience to many hedge funds and other small sellers involved in these speculative names.
Since then, stocks have retreated from their highest prices, and short-sellers have begun to build positions again. According to Factset, AMC has 19.5% less interest, while GameStop sits at 21.4%.
These big bets against the company can sometimes lead to a dramatic one-day move for a stock, as hedge funds close their small positions when a stock rises, thus creating more buying pressure. This process is known as a short squeeze.
Even with Thursday’s big move, stocks have remained below their highs since early 2021. GameStop, which rose to $ 483 per share on an intraday basis last January, was trading between $ 90 and $ 100 per share on Thursday.
AMC, which hit an intraday of $ 72.62 last June, was about $ 12 per share on Thursday.
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