May. 26, 20214 min read

GameStop, AMC Surge as Reddit Army Marches Again

Written by Staff

Yesterday, Reddit-fueled meme stocks made a roaring comeback after languishing for weeks.

Shares of GameStop (NYSE: GME) were up 15 percent by the close on Tuesday, while shares of AMC Theaters (NYSE: AMC) were up 21 percent.

The two FinTwit juggernauts were joined by a slew of other forum favorites, as positive company-specific headlines coincided with a technical bottom in growth stocks.

Traders know that when these names get going, the momentum is massive, the volatility is violent, and the potential to profit from them is back in the headlines. 

But what’s making these retail darlings move after such a long period of stagnation? 

And is it too late to enter, or is the next ramp-up just beginning?

Let’s take a brief look at both companies and try to make an informed prediction about where they’re heading in the near term.

Amazon Buys MGM

The biggest headline to cross FinTwit this week was Amazon’s surprise $8.5 billion purchase of legacy film studio MGM.

Furthering their push towards Hollywood domination, the acquisition is the company’s second-biggest in its history — dwarfed only by its 2017 purchase of Whole Foods for $13.4 billion.

Such a big shift in the film industry has reignited retail interest in the sector, and Reddit’s favorite movie stock is AMC.

In fact, retail traders love AMC stock so much that CEO Adam Aron believes they’ll be the rising tide that lifts the beleaguered theater chain back to its glory days.

“Just go on Twitter, just go on Reddit, just go on YouTube, read what these people write. They love AMC,” Aron gushed on a recent earnings call.

Even before news of the Amazon-MGM deal hit the wire, AMC had begun moving earlier this month when the company announced they had raised $428 million in a stock sale.

Things are certainly moving in the right direction for the company internally, which is lining up serendipitously with the country reopening — and movie theaters getting close to a day when they once again reach full capacity.

But we can’t discuss Reddit mania without briefly diving into the king of all meme stocks: GameStop.


While the move in AMC shares had already broken out around the midway point of May, its partner in crime GameStop was a different chart, coiling up modestly. 

Then on Tuesday, the company quietly announced plans to develop a non-fungible token platform, causing trader interest to explode as soon as the market opened.

“We welcome exceptional engineers (solidity, react, python), designers, gamers, marketers, and community leaders. If you want to join our team, send your profile or something you’ve built to:”

That is all that the mysterious page says, except for a Game Boy-inspired image in the center, showing a screen that reads: “Power to the players. Power to the creators. Power to the collectors.”

As if it couldn’t get any better for retail $GME bulls, the landing page also showcases an address linking an Ethereum (ETH) wallet, solidifying the collision of cryptocurrency traders and WallStreetBets retail scalpers.

Plus, “GME NFT” just rolls off the tongue, doesn’t it?

Trading the Mania

The bullish volume and price action continued into Wednesday for both stocks.

At the time of writing, AMC is trading for $19.60 (19 percent higher on the day,) while GME is trading for $247.63 (18 percent higher on the day.)

Options volume has also exploded throughout the week as bulls push hard for a gamma squeeze, the specific breed of call-driven short squeeze that caused an international phenomenon around GME shares in late January.

Whether you’re planning to swing trade shares or options, it can be helpful in these situations to wait for a dip to enter. 

This is especially true with options — as high implied volatility will cause a small dip in the share price to engender a massive drop in call prices.

If you’re scalping, make sure to stick to the personal rules and strategies that work for you consistently. 

It’s incredibly tempting to allow FOMO to take over on days like these, but doing so all but guarantees you’ll lose money or make less than you should.

Featured cover image editorial credit: Michael Vi /