GameStop and AMC fall in a single day after an explosive rally
A GameStop store in New York.
Scott Mlyn | CNBC
GameStop and AMC Entertainment dropped in on Wednesday overnight to return part of the meteoric rally amid a retail frenzy.
The stationary video game retailer’s shares fell 15.97% in expanded trading after rising more than 130% during regular business hours. The cinema chain declined 26.58% in overnight trading after stocks rose 300% in extremely strong trading.
The couple were a popular target on Reddit’s Wallstreetbets chat room, where a wave of home traders are focused on sharply shortened stocks, driving stocks higher and crowding out hedge funds short sales.
The forum, which has more than three million members, went private briefly as moderators said they could “not ensure Reddit’s content policy”.
GameStop is up more than 400% this week alone, and increased its profits to a staggering 1,700% in January. AMC is also up over 450% this week. On Wednesday, more than a billion stocks changed their name to AMC, the highest volume ever.
Increased speculative behavior by retail investors is raising eyebrows on Wall Street, and many have been concerned that it may be a sign of a bubble where the stock market is hit record highs.
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