The return of prominent investor and analyst Keith Gill to social media has helped GameStop Corp.’s shares soar over the past two days, but experts warn investors that the “buying frenzy” may be coming to an end.
A key player in the 2021 meme-stock craze, Gill (also known as Roaring Kitty) brought GameStop (GME, +71.53%) and fellow meme darling AMC Entertainment Holdings Inc. (AMC, +85.78%) shares soaring after his return to X, formerly known as Twitter.
GameStop’s stock increased by 77% on Tuesday morning following a 74.4% gain on Monday. With 67.16 million shares traded, the volume of the stock is significantly higher than its 65-day average of 9.74 million shares. AMC’s stock ended Monday’s session higher by 78.4%, and it was up 98.8% on Tuesday. The stock of the chain of movie theaters is currently trading at 211.46 million shares, which is higher than its 65-day average of 25.04 million shares.
“Trading is best when there is a lot of volume along with significant movement,” stated Cory Mitchell, an analyst at Trading.biz, a website that provides investing information. “However, this is just hype, with the upward movement predicated on conjecture regarding the meaning of a picture.”
Gill seemed to be paying attention based on his Sunday post on X. The post didn’t specify what he is watching closely, but the recent spike in GameStop’s shares brought back memories of the retailer’s heyday as a meme stock three years prior.
Mitchell continued, “Anyone trading these companies must understand they could come crashing back down as soon as the buying frenzy stops. These are not fundamentally strong companies.” “If you decide to invest in these stocks, use stop losses and take advantage of the current upward price momentum. It may endure for some time, but unlike in 2021, you won’t be left holding the bag when they collapse again.and up until recently continued to decline.
A partner at the legal firm Greenspoon Marder named Howard Ehrenberg added that the movement in GameStop’s stock is not determined by the company’s core performance.
He told BourseWatch on Monday, “I think this is pure speculation to try to squeeze the shorts that have always existed on Gamestop.” “If the price reverses at the same speed, don’t be shocked.
