Despite the broader market sell-off, shares of two meme stocks surged higher on Thursday, boosted by retail investors, as GameStop's stock was halted several times for volatility after it surged more than 20%, while AMC Entertainment also rallied more than 10%.
Trading was halted for as many as four times because of the high volatility.
Despite the ongoing market sell-off, meme stocks bucked the trend and surged higher thanks to retail investors buying shares.
Video-game retailer GameStop's stock was halted as many as four times on Thursday morning, rising up to 33% at one point before paring back gains somewhat.
AMC Entertainment's shares jumped up to 29% earlier in the morning before falling back down to earth.
Both stocks, which are favorites among retail investors, were still higher on Thursday, with AMC gaining 15% and GameStop rising over 13% to trade at $93 per share.
The two companies are heavily shorted, with numerous hedge funds and short-sellers betting against their stocks.
Large short positions against a company can often lead to wild swings in share price, as retail investors driving up the stock can create a short squeeze and force hedge funds to close out their shorts.
Despite moving higher on Thursday, meme stocks have struggled this year, falling victim to the wider selloff that has roiled markets. AMC shares have fallen more than 60 percent in the last four years.
In early 2021, retail investors used online forums to coordinate trades to drive up stock prices. AMC hit a peak of around $60 per share in June last year, while GameStop shares rose as high as $483 per share in January 2021.
The company announced in March that it plans to create an NFT Marketplace by the end of July, and shares of the company have gotten a boost in recent months. The company announced that it will ask shareholders to approve a stock split in order to make it easier for retail investors to buy shares. While stock splits don't change the company's value, they can provide a short-term boost in share price.
The experts don't think market conditions are dangerous.
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