The recent surge in meme stocks, including GameStop Corp. (NYSE:GME), AMC Entertainment Holdings (NYSE:AMC), and BlackBerry Ltd (NYSE:BB), is not the result of retail traders acting in unison, according to a top industry executive.
What Happened: JJ Kinahan, CEO of IG North America, suggested that the current meme stock rally is not driven by retail traders, as was the case in the past. Kinahan shared his views during an interview on CNBC's Last Call.
"Last time, in my opinion, this started out with retail traders all doing something at the same time. I do not get the feeling that's what happened this time," Kinahan said, referring to the current meme stock surge.
"Last time, in my opinion, this started out with retail traders all doing something at the same time. I do not get the feeling that's what happened this time," says IG North America CEO @TheJJKinahan on who's behind the meme rally. $GME $AMC $BB pic.twitter.com/Uuq2LHfnkE
— Last Call (@LastCallCNBC) May 14, 2024
While the exact catalyst for the recent meme stock rally remains unclear, the surge in these stocks has been remarkable. On Tuesday, GameStop's shares soared by as much as 113%, while AMC experienced a 129% surge in early trading before pulling back.
Social media-fueled trading gained traction with the re-emergence of "Roaring Kitty," also known as Keith Gill, a prominent retail trader from the 2021 meme stock era. Gill resumed posting on social media on Sunday, sparking renewed interest and activity in trading circles.
Why It Matters: The current meme stock rally has been a hot topic in the financial world, with many analysts speculating on the driving forces behind it. Some, like Kinahan, believe that retail traders are not the primary force behind the surge, while others, such as Jim Cramer, have suggested that companies like GameStop and AMC may use the stock surge to raise capital through public offerings.
As the meme stock rally continues, analysts are also considering potential factors that could fizzle the rally, such as stock offerings and market boredom. However, for now, the surge in meme stocks is undeniably driving significant interest in the stock market.
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