Over a year removed from the madness of the infamous GameStop [GME] short squeeze and meme stocks are still finding their way into the headlines.
Yesterday saw two in particular catch the attention of investors, with the aforementioned GameStop’s shares spiking by 25%, while AMC [AMC] shares shot up by a whopping 45%.
So, are we in for another round of meme stock mania?
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Why is AMC stock up so much?
Let’s take a look at AMC first. The company announced that it was buying a stake in a company that mines gold and silver — Hycroft Mining. The company is sitting on a war chest of roughly $1.8bn, so this $28m investment might not seem like much. What it is, though, is a showing that AMC is willing to travel far outside of its typical remit in order to diversify its holdings.
Investors saw this move and decided to buy in, with AMC stock up over 70% in the past five days alone. CEO Adam Aron went so far as stating that “I’d like to think there will be more third-party external M&A announcements going forward where AMC can reach for the stars and intriguing investments that have potentially attractive returns.”
Short interest in AMC remains at close to 20%, so investors may be searching for another short squeeze that, as of now, has yet to come.
Why did GameStop stock rise yesterday?
Now to GameStop. News emerged last week that an investment company led by billionaire Ryan Cohen had bought 100,000 shares in the video game retailer. GameStop’s stock responded by skyrocketing, with shares in the firm up over 36% in the past five days.
Cohen, the founder of pet retailer Chewy, is currently GameStop’s chairman, so this show of faith is certainly one for investors to take note of. He is also no stranger to the meme stock craze, with the billionaire investor having announced earlier in the month that he also owns nearly 10% of Bed Bath & Beyond [BBBY].
Monday marked a tenth straight day of share price increases for GameStop, something we haven’t seen since early 2021. While some of this can certainly be attributed to a more positive-than-expected earnings call, Cohen’s influence and increased short interest seem to be moving the needle for the most part.
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