GameStop, AMC rise in heavy trading as meme stocks roar again

(Reuters) -Shares of GameStop and AMC edged higher in volatile premarket trading on Wednesday, extending a rally that began after “Roaring Kitty” Keith Gill, the central figure behind the 2021 meme stock frenzy, resurfaced on social media.

Cinema chain AMC gained 6.4%, after rising 135% in the past two sessions, while video game retailer GameStop rose 6% after hitting its highest level since June 2021 on Tuesday.

Both the retail investor darlings briefly turned negative and were the most actively traded NYSE stocks at 5:45 a.m. ET.

“Roaring Kitty”, the online persona of Gill, shared a clip from the movie “Braveheart” on social media platform X on Tuesday with the word “GameStop” flashing on the screen as Mel Gibson, playing William Wallace, screams “freedom”.

It is the first time Gill mentioned a company name after his return to X following a three-year gap, which set off a rally in meme stocks reminiscent of 2021 retail trading frenzy.

In 2021, his YouTube streams and a string of Reddit posts had helped attract a flood of retail cash into GameStop, burning hedge funds that had bet against the company.

The latest posts hinted at Gill coming back in action. Gill did not respond to a Reuters request for comment.

His return is “sparking big talk in chat rooms about what he may have up his sleeve”, said Susannah Streeter, head of money and markets at Hargreaves Lansdown.

“This is a trend driven by entertainment rather than company fundamentals.. stocks which rocket up on pure speculation, tend to drop back down to earth very quickly.”

Vlad Tenev, CEO of retail trading platform Robinhood, said on X the app hit $5 billion in equities trading volume on Tuesday, among the highest in the past 12 months.

Bill Gross, a billionaire once known as the “Bond King” after founding fixed income giant PIMCO, said the meme stocks trading frenzy was “definitely opportunistic” and his strategy was to “sell 400% annualised volatility”, an options play.

(Reporting by Alun John in London and Medha Singh in Bengaluru; Editing by Amanda Cooper, Varun H K and Arun Koyyur)