GameStop and AMC's Meteoric Rise: The Meme Stock Phenomenon

The Return of Meme Stock Mania: What You Need to Know About GameStop and AMC's Recent Surge

Editorial Team (ET)May 9, 2025

Meme-stock traders again piled into shares of GameStop Corp. and AMC Entertainment Holdings Inc., a day after both soared in a revival of the retail frenzy. The video-game retailer jumped as much as 113% on Tuesday, while the beleaguered movie theater chain surged 129% — triggering halts in the trading of both soon after the opening bell. Even with the rapid rallies, each remains below the heights they reached during 2021’s meme-stock heyday.

Background on Meme Stocks

Meme stocks are a fascinating phenomenon in the financial world. These are stocks that gain popularity among retail investors through social media platforms rather than through traditional financial metrics. The rise of meme stocks can be attributed to a combination of factors, including the democratization of stock trading through platforms like Robinhood, the influence of social media communities such as Reddit’s r/WallStreetBets, and a strong sense of community and shared purpose among retail investors.

The Rise of GameStop and AMC

The initial surge in GameStop and AMC stocks in 2021 was nothing short of spectacular. Spearheaded by figures like Keith Gill, known as "Roaring Kitty," who used social media to rally day traders and squeeze short sellers, the movement gained significant momentum. Reddit and other social media platforms played a crucial role in organizing and galvanizing retail investors, creating a wave of buying that sent the stocks soaring.

Recent Surge in GameStop and AMC Shares

The recent surge in GameStop and AMC shares was triggered by a series of events that reignited interest in these stocks. GameStop's shares soared by as much as 113% on Tuesday, while AMC's shares jumped 129%. This dramatic increase in stock prices led to trading halts shortly after the opening bell, as market mechanisms kicked in to prevent excessive volatility.

Trading Halts and Market Reactions

Trading halts are temporary pauses in trading, usually triggered by significant price movements within a short period. These halts are designed to prevent panic selling or buying and to give investors a moment to assess the situation. The market reacted swiftly to the surges in GameStop and AMC, with both stocks experiencing multiple trading halts throughout the day. Matthew Tuttle, CEO of Tuttle Capital Management, noted, “They did what they needed to do, and the shareholders didn’t get wiped out.”

AMC’s Strategic Moves

AMC announced on Tuesday that it had completed a previously announced at-the-market offering of shares, raising about $250 million in total by selling 72.5 million shares at an average price of $3.45. This move was part of AMC’s strategy to capitalize on the high stock prices and strengthen its financial position. The successful completion of this offering was a positive development for the company, helping to bolster its cash reserves and provide more financial stability.

GameStop’s Market Performance

GameStop also saw a significant increase in trading volume and stock performance. On Monday, GameStop ranked as the second-most traded stock by retail investors for out-of-the-money call option volumes, according to Giacomo Pierantoni, head of data at Vanda Research. This surge in activity underscores the ongoing interest and speculative fervor surrounding GameStop among retail investors.

Broader Market Impacts

The resurgence of interest in GameStop and AMC had a ripple effect across the market, lifting a number of other stocks with high short interest. On Monday, shares of SunPower Corp. jumped by a record, while BlackBerry Ltd., Lucid Group Inc., and Virgin Galactic Holdings Inc. also rallied. This pattern of sympathy trading is not uncommon, as investors look for other potential opportunities in the wake of significant movements in meme stocks.

Retail Traders' Evolution

Since the height of the meme stock mania in 2021, retail traders have become more seasoned and strategic in their approach. While the initial surge was characterized by a staunch commitment to “hodl” (hold on for dear life), many of today’s traders are more experienced and adept at identifying entry and exit points. Matthew Tuttle commented, “The people trading this stuff now are a lot more seasoned and understand where to get in generally speaking and where to get out.”

Expert Opinions and Market Predictions

Financial experts have offered a range of opinions on the recent meme stock surge and its implications for the broader market. Some believe that the resurgence of interest in these stocks indicates a renewed confidence among retail investors, while others caution that the volatility and speculative nature of meme stocks could lead to significant risks. Predictions for the future of meme stocks remain varied, with some analysts expecting continued volatility and others suggesting that the phenomenon may eventually fade as market conditions change.

Conclusion

The recent surge in GameStop and AMC shares highlights the enduring influence of retail investors and social media on the stock market. While these stocks remain below their 2021 highs, the rapid rallies and subsequent trading halts underscore the ongoing volatility and speculative fervor surrounding meme stocks. As retail traders continue to evolve and adapt, the future of meme stocks remains uncertain, but their impact on the market is undeniable.

Game Stop

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