Investor appetite for “meme stocks” may already be waning.
Shares of GameStop, AMC Entertainment, BlackBerry and other companies embraced by retail traders fell Wednesday morning before U.S. financial markets opened. Stocks had surged the day before after Keith Gill, known online by his handle “Roaring Kitty,” resurfaced on X (formerly Twitter) after a three-year hiatus.
Meme stocks are companies whose shares are driven by social media buzz rather than traditional financial fundamentals such as growth and profits.
Gill, who has a large following on social media platforms, became the face of stock traders in 2021 after buying shares of GameStop, a video game retailer, for $53,000 and turning it into a $53,000 stake. several million amid growing hype around the title. .
After soaring more than 130% earlier this week, GameStop shares were down 9% at $44.17 in premarket trading. AMC, a movie theater chain, fell 8.3%; business software maker BlackBerry fell 2%; and Virgin Galactic, Richard Branson’s spaceflight company, fell 8%.
Wall Street analysts have warned of the risks of investing in highly volatile meme stocks, which are typically owned by loss-making companies.