Shares of retail traders’ darling GameStop jumped 12.5% in strong premarket trading volume on Wednesday, looking to build on a rally from the previous session as a broader recovery in markets spurred appetite for speculative bets.
The videogame retailer’s shares were last at $15.12, the third most actively traded stock on the New York Stock Exchange at 5:50 a.m. ET.
On Tuesday, GameStop shares had their biggest one-day percentage gain in eight months on no clear news catalyst.
AMC Entertainment, another favorite among retail traders, rose nearly 4% to $6.95.
Both GameStop and AMC were among the most discussed by traders on social media site stocktiwts.com on Wednesday.
The recovery in meme stocks comes as the S&P 500 closes in on its highest level of 2023 on hopes U.S. interest rates have peaked, breathing some life into speculative trading that has struggled this year.
“The market optimism now vacuum retail traders in – and it’s the ultimate signal that the (market) rally is overstretched,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
GameStop shares have slumped 27% in 2023 up to Tuesday’s close, while AMC had wiped out 80% of its value.
On the options side, open interest put-to-call ratio in GameStop stood at 0.45, indicating traders’ bullish positioning.
The videogame retailer is expected to report third-quarter results next week on Dec. 6.
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