German-listed shares in hot ‘memestocks’ GameStop and AMC fell sharply in early trade in Frankfurt on Thursday, suggesting volatility is not over for the two stocks.
The two companies, both of which have their main listings in the US, have been the subject of frenzied interest from retail investors over the last two weeks. Investors on Reddit’s r/WallStreetBets forum targeted both companies for investment given the high short interest from hedge funds.
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The stock price of both GameStop (GME) and AMC (AMC) surged last week as retail investors sought to ‘squeeze’ hedge funds out of their short trades, leading to billions of dollars in losses for some hedge funds. GameStop and AMC then fell rapidly back to earth this week.
So-called ‘memestocks’ “seemed to calm down” on Wednesday, said Deutsche Bank strategist Jim Reid. Wednesday marked the first session in over a week that GameStop didn’t see a double digit percentage move either higher or lower on the day.
Thursday’s early price action in Frankfurt suggests the two shares could be hit by more volatility when trading begins later today in New York.
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