GameStop stock increases over 100% in meme-stock market comeback

GameStop stock surges 118% in premarket trading, fueled by "Roaring Kitty" and meme stock rally. AMC also sees significant gains.

GameStop's stock (GME) saw a massive surge of 118% in premarket trading on Tuesday, following a 74% rally on Monday. This surge was fueled by the return of Keith Gill, also known as "Roaring Kitty," whose bullish stance on GameStop sparked the meme stock frenzy in 2021.

Prior to Monday's rally, GameStop shares had been relatively flat for the year but had seen a 60% increase in the past month. With the recent gains, GameStop stock has soared over 180% in the last month, excluding Tuesday's pre-market gains.

The surge in GameStop was mirrored by a rally in AMC (AMC), which also saw an increase of nearly 80% on Monday. AMC continued its upward trajectory on Tuesday, with premarket trading showing a surge of over 120%.

Nicholas Colas, co-founder of DataTrek Research, likened the recent trading activity to the events of early 2021, when GameStop experienced a massive short squeeze. Despite the losses suffered by short sellers during the previous meme stock rally, short interest in GameStop remains high, with 24% of the float sold short as of Monday.

Ihor Dusaniwsky, managing director at S3 Partners, reported that GameStop shorts had incurred over $1.3 billion in losses in May following Monday's rally, with Tuesday's spike expected to add to that total.

Colas emphasized the challenging position of traders shorting a stock experiencing such aggressive gains, noting that the only viable option is to close out the position, regardless of the price. There is also a fear that retail traders may be drawn into a repeat of the 2021 frenzy.

Ines Ferre, a senior business reporter for Yahoo Finance, highlighted the ongoing volatility in the market and the potential implications for investors. Stay updated on the latest stock market news and in-depth analysis to navigate through these turbulent times.