This article originally appeared on MarketWatch.
The two biggest “meme” stocks are giving retail investors something to talk about on Tuesday, and leading at least one social-media tracker to predict that another short squeeze may be about to erupt.
GameStop (ticker: GME) and AMC Entertainment (AMC) got off to very different starts in early trading Tuesday, but raucous social-media chatter around both equities before the opening bell eventually put both stocks back on the same trajectory that they have been on for days.
According to HypeEquity, a platform that compiles social-media activity on individual stocks and uses that data to track what it calls “social sentiment analysis,” said that mentions of AMC spiked more than 800% Tuesday morning, while mentions of GameStop soared over 1,400% by volume.
That surge in popularity augured very differently for the two meme stocks, with AMC moving up for its eighth-straight day while GameStop fell as much as 6% in the first half-hour of trading. In addition to their extremely online popularity, both companies have spent the first half of 2021 leveraging their meme status to get out from major debt loads with significant new equity offerings.
But HypeEquity’s data indicated that GameStop’s day might see a turnaround.
Comments about buying GameStop outpaced those about selling, and while AMC’s social-media action evinced an opposite trend, more than 20% of comments referred to both AMC and GameStop. Perhaps most tellingly, HypeEquity’s data showed that roughly 8% of comments on both stocks included the word “squeeze.”
“When looking at the comments themselves,” said HypeEquity founder Travis Rehl. “There’s a clear desire for a short squeeze either today or very soon.”
Reports of short sellers in GameStop, or those betting for declines in the company’s shares, were circulating widely on Monday, and Tuesday’s early price action combined to create one clear narrative; fighting hedge funds that users believe are renewing their campaign to short the meme stock. So-called meme stocks are ones that tend to be influenced by hype on social media rather than just company fundamentals.
“Remember, their portfolio full of derivatives is nothing against the power of HODLING the stock,” proclaimed Mexicanred1 on r/Superstonk. “There’s only one way this can go… Just up.”
Just after 11 a.m. EST, shares in GameStop appeared to respond to that sentiment, popping more than 4% in less than 10 minutes and going briefly positive on the day. Shares of AMC surged almost 3% in the same period.
At last check, GameStop shares are down 1.1% but had been up nearly 12% so far this week. In the year to date, GameStop’s stock is up nearly 850%, FactSet data show.
Since GameStop’s rise in late January, retail investors have remained bullish on the stock and were re-energized when Keith Gill, the trader on Reddit known as DeepF—ingValue, disclosed that he had doubled down on it.
Meanwhile, AMC shares are climbing 0.6% on the day and have gained more than 8% since the start of the week. For the year, AMC’s stock has risen more than 560%.
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Is a New Short Squeeze in GameStop and AMC? What to Know. - Barron's
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