Led by GameStop (NYSE:GME) and AMC Entertainment (NYSE:AMC), meme stocks have been making a big comeback recently. In fact, many beloved names have erased their 2022 losses and embarked on multiday winning streaks.
What’s Driving the Meme Stocks Rally?
GME stock has been propelled higher by the purchase of shares by a number of company insiders. AMC stock has advanced thanks to an unusual investment by the movie theater owner and a recent statement by its CEO indicating that more such moves are on the way.
Additionally, in recent days, meme stocks have climbed due to the recovery of equities in general and the resurgence of growth stocks in particular.
More About GameStop and AMC
On March 22, GameStop Chairman Ryan Cohen shelled out $10.2 million to buy 100,000 shares of GME stock. Meanwhile, one of the company’s board members, Larry Cheng, purchased 4,000 of its shares for $383,355 on March 21.
According to a well-known Wall Street saying, insiders only buy their company’s shares because they believe that their stocks will rise in the future.
Turning to AMC, the movie theater operator bought a 22% stake in a miner of precious metals, Hycroft Mining (NASDAQ:HYMC), for $27.9 million. In a tweet, AMC CEO Adam Aron reported that Hycroft “has 15 million ounces of gold resources! And 600 million ounces of silver resources!”
AMC is playing on offense again with a bold diversification move. We just purchased 22% of Hycroft Mining (NASDAQ: HYMC) of northern Nevada. It has 15 million ounces of gold resources! And 600 million ounces of silver resources! Our expertise to help them bolster their liquidity. pic.twitter.com/LihqZguwnd
— Adam Aron (@CEOAdam) March 15, 2022
And yesterday, Aron told Reuters that AMC would seek to make additional “transformational” transactions.
The CEO characterized the Hycroft deal as “bold.” Indeed, it’s fairly unusual for companies to invest in firms whose businesses are completely unrelated to their own.
Yesterday AMC stock soared 45%, while GME stock jumped 25%. Among the other meme stocks that have rallied powerfully in recent days are Bed Bath & Beyond (NASDAQ:BBBY), Newegg Commerce (NASDAQ:NEGG) and Koss (NASDAQ:KOSS).
Some of these names are down today after their huge gains yesterday, but they all are still seeing increased interest and trading volume.
On the date of publication, Larry Ramer did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
