GameStop and AMC plunge by more than 50% as Reddit short squeeze begins to fade
- Reddit day traders are failing to hold the line, based on Tuesday's trading of GameStop and AMC.
- GameStop plunged by as much as 67% on Tuesday after falling by 31% on Monday.
- AMC Entertainment had fallen by 55% at intraday lows on Tuesday after trading flat on Monday.
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The epic short-squeeze rallies fueled by traders on Reddit's Wall Street Bets forum are unwinding, based on Tuesday's trading activity.
GameStop fell by as much as 67% on Tuesday, adding to a 31% decline on Monday. The stock was down 85% from its all-time high of $483.
GameStop had surged by more than 2,000% in January, leading to massive losses for some hedge funds like Melvin Capital, which was down 53% for the month.
The activity spread to another stock favored by the Reddit traders, AMC Entertainment. The movie-theater chain had fallen by 55% at intraday lows on Tuesday and was down 71% from its recent high of $20.36.
The trading activity suggests that Reddit users are failing to "hold the line," the battle cry of Wall Street Bets.
But as of Monday, one Reddit user was still holding the line: u/DeepFuckingValue. The user, who has been long GameStop since 2019, posted a screenshot of his trading position after the close signaling that he had not sold his outstanding positions in the video-game retailer.
Despite Monday's decline, the user, who also goes by the name RoaringKitty, was still up nearly 3,000% on his GameStop position, which is made up of both common stock and call options.
The top comment on RoaringKitty's post on Monday was "HOLDDDDD."
