Could a
single tweet reignite the meme stock frenzy that took over Wall Street three
years ago? GameStop and AMC’s shares are again surging, with trading on
these stocks being halted multiple times just this week.
Such suspensions
are a standard mechanism to protect against excessive volatility , but some
retail trader are complaining about their service providers, accusing them of
blocking trades. This frustration is unsurprising, given that major players
like Robinhood implemented similar measures in 2021.
Keith Gill,
known online as “Roaring Kitty” and considered the catalyst of the
pandemic-era stock craze, reappeared on Twitter after three years. On Sunday,
he posted an image depicting a man sitting in a chair. While
this might seem insignificant picture, gamers recognize it as a meme indicating
that “things are getting serious.”
— Roaring Kitty (@TheRoaringKitty) May 13, 2024
The result?
GameStop shares (NYSE: GME) opened with a significant gap on Monday, ending the
day up 74%. By Tuesday, they surged another 60%, peaking at a 114% gain.
Similarly, AMC shares (NYSE: AMC) rose 78% at the start of the week and added
another 32% on Tuesday.
Throughout
May, AMC shares increased by 133%, while GME shares soared by 340%, surpassing
Bitcoin’s annual gains.
GameStop shares are once again booming. Source: Yahoo Finance
“There are
a couple of differences between 2021 and 2024, not least that the stock price
is far higher now than it was before the meme stock craze in 2021,” said Kathleen
Brooks, Research Director at XTB. “Back then it was trading around $5, today it
is trading at $30, so it may not be as much of a bargain as it once was.”
Trading Halts on AMC and
GameStop
With such
high volatility comes heightened investor interest and increased intervention
by exchanges. According to Evan Gold, the founder of Stock Market News, the NYSE halted trading on these two meme stocks 38 times during Tuesday’s session. As
a result, retail trading platforms also temporarily halted trading on AMC and
GameStop.
Trading in GameStop $GME and $AMC was halted a combined 38 times today
— Evan (@StockMKTNewz) May 14, 2024
eToro
issued a statement to reassure users that these halts are a normal “safety
mechanism.”
„Please
note that these halts are part of standard market dynamics and are not
initiated by eToro. We continue to reflect the pricing we receive, however, you
may experience interruptions in trading due to these exchange -imposed
suspensions,” eToro explained
Have other platforms made a similar move? It is hard to find more information on this; one X user only reported encountering a similar problem with Trading212.
Trading suspended @Trading212 #GameStop #nyse #Nasdaq pic.twitter.com/uZeEsFHg6m
— Parth Patel (@Parthyoofficial) May 14, 2024
The renewed
attention on meme stocks has left users wary, especially given the 2021 events
when platforms like Robinhood blocked access, citing the need to
protect users from excessively volatile markets. Back then, traditional brokers
like TD Ameritrade, IG Group, and Charles Schwab also restricted trading on
these stocks. Now, the current trading halts are due to the exchanges’ automatic defensive mechanisms.
What You Should Know about
GameStop, AMC, and Meme Stocks?
The
phenomenon of meme stocks, particularly involving companies like GameStop and
AMC, captivated the financial world in early 2021. It began with a group of
retail investors, mainly organized on social media platforms like Reddit, who
collectively decided to buy shares of these companies.
GameStop, a
struggling video game retailer, and AMC, a movie theater chain severely hit by
the pandemic, became the focal points of this movement. These investors aimed
to drive up the stock prices, partly to profit but also to challenge
institutional investors, particularly hedge funds that had heavily shorted
these stocks, betting that their prices would fall.
The sudden
and dramatic increase in GameStop’s and AMC’s stock prices led to
significant volatility in the stock market. This movement, driven by what many
called “meme stocks,” saw prices rise to levels far beyond what
traditional financial metrics would justify.
This surge
forced short sellers to buy back shares at much higher prices to cover their
positions, resulting in substantial losses for these hedge funds. The retail
investors saw this as a form of financial rebellion, leveraging their
collective power to challenge the norms of Wall Street.
Is the meme
stock mania returning? For now, it seems too early to answer this question definitively.
Could a
single tweet reignite the meme stock frenzy that took over Wall Street three
years ago? GameStop and AMC’s shares are again surging, with trading on
these stocks being halted multiple times just this week.
Such suspensions
are a standard mechanism to protect against excessive volatility , but some
retail trader are complaining about their service providers, accusing them of
blocking trades. This frustration is unsurprising, given that major players
like Robinhood implemented similar measures in 2021.
Keith Gill,
known online as “Roaring Kitty” and considered the catalyst of the
pandemic-era stock craze, reappeared on Twitter after three years. On Sunday,
he posted an image depicting a man sitting in a chair. While
this might seem insignificant picture, gamers recognize it as a meme indicating
that “things are getting serious.”
— Roaring Kitty (@TheRoaringKitty) May 13, 2024
The result?
GameStop shares (NYSE: GME) opened with a significant gap on Monday, ending the
day up 74%. By Tuesday, they surged another 60%, peaking at a 114% gain.
Similarly, AMC shares (NYSE: AMC) rose 78% at the start of the week and added
another 32% on Tuesday.
Throughout
May, AMC shares increased by 133%, while GME shares soared by 340%, surpassing
Bitcoin’s annual gains.
GameStop shares are once again booming. Source: Yahoo Finance
“There are
a couple of differences between 2021 and 2024, not least that the stock price
is far higher now than it was before the meme stock craze in 2021,” said Kathleen
Brooks, Research Director at XTB. “Back then it was trading around $5, today it
is trading at $30, so it may not be as much of a bargain as it once was.”
Trading Halts on AMC and
GameStop
With such
high volatility comes heightened investor interest and increased intervention
by exchanges. According to Evan Gold, the founder of Stock Market News, the NYSE halted trading on these two meme stocks 38 times during Tuesday’s session. As
a result, retail trading platforms also temporarily halted trading on AMC and
GameStop.
Trading in GameStop $GME and $AMC was halted a combined 38 times today
— Evan (@StockMKTNewz) May 14, 2024
eToro
issued a statement to reassure users that these halts are a normal “safety
mechanism.”
„Please
note that these halts are part of standard market dynamics and are not
initiated by eToro. We continue to reflect the pricing we receive, however, you
may experience interruptions in trading due to these exchange -imposed
suspensions,” eToro explained
Have other platforms made a similar move? It is hard to find more information on this; one X user only reported encountering a similar problem with Trading212.
Trading suspended @Trading212 #GameStop #nyse #Nasdaq pic.twitter.com/uZeEsFHg6m
— Parth Patel (@Parthyoofficial) May 14, 2024
The renewed
attention on meme stocks has left users wary, especially given the 2021 events
when platforms like Robinhood blocked access, citing the need to
protect users from excessively volatile markets. Back then, traditional brokers
like TD Ameritrade, IG Group, and Charles Schwab also restricted trading on
these stocks. Now, the current trading halts are due to the exchanges’ automatic defensive mechanisms.
What You Should Know about
GameStop, AMC, and Meme Stocks?
The
phenomenon of meme stocks, particularly involving companies like GameStop and
AMC, captivated the financial world in early 2021. It began with a group of
retail investors, mainly organized on social media platforms like Reddit, who
collectively decided to buy shares of these companies.
GameStop, a
struggling video game retailer, and AMC, a movie theater chain severely hit by
the pandemic, became the focal points of this movement. These investors aimed
to drive up the stock prices, partly to profit but also to challenge
institutional investors, particularly hedge funds that had heavily shorted
these stocks, betting that their prices would fall.
The sudden
and dramatic increase in GameStop’s and AMC’s stock prices led to
significant volatility in the stock market. This movement, driven by what many
called “meme stocks,” saw prices rise to levels far beyond what
traditional financial metrics would justify.
This surge
forced short sellers to buy back shares at much higher prices to cover their
positions, resulting in substantial losses for these hedge funds. The retail
investors saw this as a form of financial rebellion, leveraging their
collective power to challenge the norms of Wall Street.
Is the meme
stock mania returning? For now, it seems too early to answer this question definitively.
Feed from Financemagnates.com