GameStop suffered a 12% pullback to snap a record-tying win streak, but the meme stock is still up double digits this week
Shares of GameStop Corp. suffered a sharp correction in the past week, as they snapped a record-tying streak of gains, but it wasn’t enough to cool the renewed meme-stock frenzy.
Other meme stocks also showed strong weekly gains despite pullbacks of their own, a sign that investors have some appetite for risk despite multiple macro concerns.
GameStop’s stock GME, -0.95% climbed 5.3% in midday trading Friday after the videogame retailer disclosed overnight that it was looking to more than triple the number of shares it could have outstanding to one billion so that it could enact a stock split. Read more about GameStop’s stock-split plans.
That puts the stock on track to snap a three-day losing streak, in which it fell 12.1%. The pullback snapped a 10-day win streak, the longest in 12 years, which matched the record streak first set 17 years ago, as the stock closed at a near four-month high on Monday. The stock had rocketed 142.7% during that streak. Read more about how investors showed a rare resiliency during the win streak.
Despite the midweek pullback, GameStop investors still enjoyed a 15.4% gain for the week.
Meanwhile, fellow meme stock AMC Entertainment Holdings Inc. AMC, -5.44% dropped 5.2% Friday, and has tumbled 20.6% amid a three-day losing streak. That wasn’t enough to discourage “memesters,” as the stock was still up 15.5% for the week, and has soared 63.4% amid a three-week win streak.
Helping fuel interest in AMC this week, Time magazine named the company as one of the world’s 100 most influential, with the company’s “meme-stock mastery” putting it within the list’s “Disruptors” category.
“Could the meme craze stretch higher? Yes, it could stretch to levels the traders want them to!” wrote Swissquote Senior Analyst Ipek Ozkardeskaya. “And because these stocks do not trade on fundamentals, the sky, or the moon, is the limit. It all depends on the overall risk appetite — but for now, the pajama traders defy rising inflation, tightening Fed, worsening pandemic and the war.”
Part of AMC’s appeal to investors was the rocket ride enjoyed by shares of gold and silver miner Hycroft Mining Holding Corp. HYMC, -6.09%, a meme stock that AMC invested nearly $30 million in with the belief it would “make a lot of money.”
Hycroft shares shed 4.1% on Friday, and have fallen 14.7% in the past three days. But after more than doubling the first two days of the week to close Tuesday at an eight-month high, the stock was still up 72.3% on the week.
As a sign of investors’ risk appetite, the CBOE Volatility Index VIX, -4.52%, also known as the stock market’s fear gauge because it tends to rise as the market falls, declined 0.2% on Friday while the S&P 500 index SPX, +0.34% slipped 0.2%. The VIX has lost 1.4% on the week, even as the S&P 500 has eased 0.5% over the same time.
