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After two bright green trading days, so-called meme stocks are losing ground. Both GameStop and AMC Entertainment plunged deep into the red.

In the news: The rally in meme stocks is losing momentum.

  • During the first two trading days of this week, GameStop gained as much as 190 percent. AMC Entertainment shot up about 150 percent. Tuesday at the start of trading, the gains were even larger, but as the day progressed, they weakened.
    • A tweet by Youtuber Roaring Kitty, who was also responsible for the notable boom in meme shares in 2021, was behind the renewed interest in GameStop and others over the past two days. He had not posted anything on X, the former Twitter, since June 2021.
    • Consequently, some brokers saw a sharp increase in the number of transactions in meme shares over the past few days. Saxo, for example, reported that the number of customers trading GameStop shares was up to 10 times higher than on a normal trading day.
  • Today, price charts are turning red. GameStop is down more than 30 percent after some three hours of trading. AMC Entertainment is down 20 percent.

Experts are not fans of meme stocks

Noted: Many experts frowned in recent days when they looked at GameStop and AMC Entertainment's share prices.

  • "Share prices were pushed up sharply in recent days by investors looking to make a quick profit," notes Oskar Bernhardtsen, investment strategist at Saxo. "Looking at the company's actual performance, GameStop should be trading at a lower price. But with such events, it is extremely difficult to make a thorough analysis because the price movements go beyond fundamental and technical analysis." He adds that it is very risky to invest in such stocks.
  • This is also the opinion of Pascal Paepen of SavingsPigs.be. "This has nothing to do with investing. It was then and is today pure spin," he notes in an interview with HLN.be. "The fact is simply that you pay a lot of money for something that is virtually worthless. Only if you can sell your share to someone willing to pay even more for it, you've won. But that's just decadent."

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