Gamestop & AMC Sluggish Even Though "Roaring Kitty" Returns

Bittime - Meme stocks Gamestop (GME) and AMC (AMC) are down despitethe return ofRoaring KittyRetail investors are now more careful, while institutional investors are playing along and dampening the potential for a wild rally like in 2021.

After being the favorites of the 2021 "meme stock frenzy", Gamestop (GME) and AMC Entertainment (AMC) shares have again attracted the attention of retail investors. This was triggered by the return of the phenomenal investor figure "Roaring Kitty" to social media. The social media account Roaring Kitty, known by his real name Keith Gill, became the center of attention in 2021 when he aggressively posted his bullish views on Gamestop shares. This action triggered a surge in purchases of Gamestop and AMC shares by retail investors, which ultimately pressured institutional investors and caused a fantastic price increase.

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However, this time the situation was different. Instead of the wild price rally that occurred in 2021, Gamestop and AMC stock prices actually experienced a decline on two consecutive trading days following the return of Roaring Kitty.

Institutional Investors Join the Play, Curb Wild Price Rally

One factor that differentiates the current situation from the "meme stock frenzy" of 2021 is the involvement of institutional investors. In 2021, institutional investors were mostly "trapped" in short selling positions in Gamestop and AMC shares. The massive buying action carried out by retail investors caused them to suffer significant losses.

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However, currently, institutional investors have taken a more strategic position. They also invested in Gamestop and AMC shares, although in more measurable amounts than retail investors in 2021. The involvement of these institutional investors also influenced the price movements of these two shares, so that wild price rallies like those that occurred in 2021 were not repeated.

Retail Investors Are More Cautious, Euphoria Fades

Data from Vanda Research, which tracks retail investor flows, shows a decline in purchases of Gamestop and AMC shares by retail investors. This indicates that retail investors are now more careful in buying these two shares.

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The euphoria that hit retail investors in 2021 seems to have faded. Lessons from drastic price fluctuations in the past have made them more selective and no longer make purchases blindly.

Warning from Former SEC Chair: Euphoria and Speculation Can Be Risky

Former SEC Chairman Jay Clayton also spoke out regarding the decline in Gamestop and AMC share prices. He warned that while it is legal to like certain stocks, buying shares driven by euphoria and speculation can be risky.

"The euphoria and speculative buying in retail circles that fueled price increases in 2021 doesn't appear to be happening this time," Clayton told CNBC.

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The warning from the former SEC Chair is in line with the current conditions in the market. Retail investors seem to pay more attention to company fundamentals and conduct analysis before buying Gamestop and AMC shares.

Conclusion: "Meme Stock" Trend Changing Direction?

Roaring Kitty's return to social media sparked optimism among retail investors for the rally in meme stocks Gamestop and AMC. However, the prices of these two shares actually decreased. The involvement of institutional investors and the caution of retail investors are factors that influence the price movements of these two shares.

The drop in Gamestop and AMC stock prices suggests that the 2021 "meme stock" trend may not repeat itself exactly. Retail investors seem to have learned from experience and are more careful in investing. Meanwhile, the involvement of institutional investors also influences price movements and prevents wild price rallies as happened previously.

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