Falling Meme Stocks... GameStop and AMC Plunge Over 30%

[Asia Economy Reporter Yujin Cho] On the 24th (local time), the three major indices of the U.S. New York stock market experienced a 'rollercoaster' ride between heaven and hell, and the prices of U.S. 'meme' stocks also plunged more than 5%.

According to The Wall Street Journal (WSJ), video game retailer GameStop and movie theater chain AMC Entertainment's stock prices fell 5.84% and 7.40%, respectively. This contrasted with the Nasdaq index, which at one point during the session dropped nearly 5% but recovered to close up 0.63%.

Since the beginning of this year, GameStop has fallen more than 32%, and AMC more than 38%, with meme stocks struggling since the new year. These stocks showed high volatility starting January last year, with gains exceeding 1000% at their peak.

Other stocks that led the meme stock craze, such as BlackBerry, Bed Bath & Beyond, and Workhorse Group, have also plunged between 14% and 36% since the start of the year.

An index created by Goldman Sachs tracking the most mentioned stocks in the WallStreetBets chatroom fell nearly 50% from its peak in November last year.

This sharp decline in meme stocks was driven by sell-offs from individual investors. According to JP Morgan Chase analysis, the net sell volume of stocks sold by individual investors by noon reached $13.6 billion (approximately 1.6218 trillion KRW). Although individuals had purchased about $12 billion (approximately 13.31 trillion KRW) during the recent two-week downturn, they reversed course on this day.

There is also an assessment that structural declines in meme stocks have begun as market anxiety and caution over early tightening ahead of the Federal Open Market Committee (FOMC) meeting take effect.

Morgan Stanley pointed out in a recent report that individual orders completely disappeared on the 20th and 21st, saying, "This is a completely different picture from early last week when the one-week moving average net buying hit an all-time high."

The Wall Street Journal reported that the WallStreetBets discussion forum, which showed how concentrated buying power from U.S. retail investors could shake the stock market, has recently been losing momentum.

The number of posts on the forum's main page dropped more than 40% to an average of 27,000 per day in November last year, compared to 47,000 in the same month the previous year.

Randy Frederick, Director of Trading and Derivatives at Charles Schwab, said, "With the shift in monetary policy reducing liquidity in the market, investment momentum in risk assets including meme stocks inevitably weakens."

This content was produced with the assistance of AI translation services.