GameStop shares jump for a second day, but are well off the highs as meme enthusiasm starts to fade

GameStop jumped Tuesday to extend the meme stock rally started by the first online post from "Roaring Kitty" in three years, but enthusiasm seemed to ease as shares cut gains.

Shares of the video game retailer last traded 42% higher after more than doubling at one point earlier. The rally in AMC faded a bit with shares gaining 45%. The movie theater operator saw shares gaining over 130% at its peak, and the rally came even after AMC raised about $250 million of new equity capital during Monday's wild trading.

GameStop and AMC each rallied over 70% Monday. The meme stock phenomenon appears to have been reignited by a recent social media update from Roaring Kitty. The man, whose legal name is Keith Gill, posted a picture on the X platform of a video gamer sitting forward on their chair — a meme used by gamers to indicate they are taking the game seriously.

It marked Gill's first post on the platform since 2021, and has since been viewed more than 23 million times. Gill followed up with a series of posts of short videos from popular TV shows and movies, although the meaning behind some of them was unclear.

Other so-called meme stocks also traded higher on Tuesday. Shares of one-time dominant smartphone maker BlackBerry popped 9%, while headphones manufacturer Koss was up 26%. Solar company SunPower climbed 60%.

"It looks like retail investors are becoming more bullish again and willing to take on more risk," Neil Wilson, chief market analyst at Finalto, said in a note. "There is no fundamental reason for the move as such - GME's last earnings report was abysmal."

In late March, GameStop said it had cut an unspecified number of jobs to reduce costs, and reported lower fourth-quarter revenue amid rising competition from