Benzinga - by Mohit Manghnani, Benzinga Editor.
On Tuesday, GameStop Corp. (NYSE:GME) and AMC Entertainment Holdings Inc. (NYSE:AMC) once again captured the spotlight as their stock prices surged by 147% and 121% in pre-market trading, respectively.
This marks a revival of the meme stock phenomenon that initially took the market by storm in early 2021 driven by Wallstreetbets on Redditt.
Market Response: According to CNBC, Financial analysts are viewing this resurgence as a speculative wave driven by retail investors coordinating through online platforms, highlighting the unpredictability and the potential risk factors associated with such stocks.
Investor Enthusiasm: Both GameStop and AMC have become emblematic of the meme stock movement, where social media and forums like Reddit play pivotal roles in influencing stock prices.
This trend has reintroduced volatility in the market, particularly affecting the shares of companies like these.
Economic Impact: The resurgence of these meme stocks not only affects individual investors but also has broader implications for the market. The sharp swings in stock prices could influence market stability and investor confidence in the short term.
Taking advantage of the up move, AMC Entertainment raised roughly $250 million on Monday by selling equity. It sold 72.5 million shares at $3.45 each.
While the equity offering was announced on March 28, the company executed the offering on Monday.
Related Securities: The recent activities have also impacted related stocks and ETFs. Notable movements were seen in BlackBerry Ltd. (NYSE:BB) and Koss Corporation (NASDAQ:KOSS), along with significant trading volumes in the SPDR S&P Retail ETF (NYSE:XRT) and the Consumer Discretionary Select Sector SPDR Fund (NYSE:XLY).
Price Action: GME shares were trading higher by 145% at $74.63 and AMC up 116% at $11.25 premarket at the last check on Tuesday.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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