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Meme stock like GameStop, Robinhood, and AMC entertainment gained traction as the overall market remains muted awaiting Fed’s commentary on stimulus measures ahead this week.
On Tuesday, August 23, meme stock king GameStop (NYSE: GME) stormed Wall Street in an otherwise quiet market. The GME stock rallied 27% as retail investors came with full force.
The GameStop stock created a major frenzy at Wall Street earlier this year. This happened as a group of retail investors on Reddit bet against the popular hedge funds. On Tuesday, the GME stock gained by 45 points ending the trading session at $210.29.
It is still trading at a 50% discount from its all-time high of $347. However, the year-to-date gains for the GME stock stand at a staggering 1100%. Amid heavy trading volume, the videogame retailer surged a staggering 36% on Tuesday. A massive 14 million GME shares changed hands which were 7x more than its 30-day average.
There’s no specific reason behind GME’s price rally at Wall Street on Tuesday. But wait, does GameStop actually need a reason to surge?
Previously on the brink of bankruptcy, GameStop has successfully delivered a stellar run on Wall Street. Back in June 2021, GameStop also announced $1 billion in a share sale to raise capital for further accelerating growth.
The company has also shown interest in the rapidly emerging non-fungible tokens (NFTs) market. In May 2021, GameStop announced its decision to build an NFT gaming platform on the Ethereum blockchain network.
Stocks Rising in This Category
Apart from GameStop, shares of AMC Entertainment (NYSE: AMC) also rallied on Tuesday. The AMC share price shot up 20% adding 7.5 points and closing at $44.26. The stock of this movie theatre chain was the most active on the Fidelity trading platform.
Trading platform Robinhood, which has earned a meme stock status, also surged 9%. On Tuesday, the HOOD stock ended trading at $49.38. Robinhood went for public listing in late July last month. Post the listing, the share price surged to an all-time high of $70.39. Recently, Robinhood announced its stellar Q2 report, however, remains skeptical about the ongoing quarter.
Other stocks that rallied on Wall Street yesterday were Clover Health (10%) and Bed Bath and Beyond (4%). On the other hand, the overall stock market performance remained muted on Tuesday.
Investors are eagerly waiting for the Federal Reserve summit scheduled ahead this week on Thursday and Friday. Rumors that the Fed is looking to dial back on its monthly bond purchases have put Wall Street under pressure.
Besides, the central bank can also detail its plan for tapering monetary stimulus. Thus, some investors believe that meme stocks can gain traction amid market volatility.