GameStop (NYSE:GME) and AMC (AMC) shares plunged sharply in Thursday premarket trading, extending their double-digit losses from a day earlier and signaling that the meme stock trading frenzy is waning.
The brick-and-mortar video game retailer tumbled nearly 17%, while the movie theater chain fell 12% in the premarket, a day after tumbling 19% and 20%, respectively.
Earlier in the week, GameStop and AMC had soared by 179% and 135%, respectively.
AMC's sell-off followed the company's announcement of a debt-for-equity swap, where AMC will issue 23.3 million shares in exchange for $163.9 million of bonds maturing in 2026. Moreover, AMC completed a $250 million stock sale on Monday.
Both meme stocks experienced remarkable rallies and surging trading volumes at the start of the week, but retail interest appears to be much smaller and short-lived this time.
According to Vanda Research, GameStop and AMC saw net retail trader inflows of more than $15.8 million and $37.5 million, respectively, on Monday. However, these figures are dwarfed by the peak daily inflows of around $87.5 million for GameStop and $170 million for AMC observed in late January 2021.
The speculative surge was reignited on Monday by a rare social media post from “Roaring Kitty,” legally known as Keith Gill. He posted a picture on the X social media platform showing a video gamer leaning forward in their chair—a meme indicating serious engagement with the game.
The return of the meme stock phenomenon pushed GameStop and AMC shares up by more than 70% on Monday, with gains extending into Tuesday. However, enthusiasm seemed to fade by the close of the previous session.