Daily Stock Market News

GameStop, Meme Stocks Hit by Market Turmoil


Shares of

GameStop Corp.


GME -5.84%

,

AMC Entertainment


AMC -7.40%

Holdings and other meme stocks numbered among the hardest hit by Monday’s market turmoil, the latest blow to the favorite bets of many online day traders. 

Videogame retailer GameStop and movie theater operator AMC fell around 6% and 7% respectively Monday, outpacing broader stock-market declines before major indexes turned higher in late trading. The drops extended a slump that has dragged down GameStop shares by one-third this year, while AMC shares have lost about 40% during the same period.

The losses come almost exactly a year after individual investors banded together in online forums to push up prices, sparking parabolic gains. GameStop and AMC, both struggling businesses at the time, finished 2021 with yearly gains of 688% and 1,183% respectively. 

Driving the declines: concerns about likely interest-rate increases by the Federal Reserve later in the year have cooled investor sentiment around Wall Street’s more speculative bets, such as tech firms, blank-check companies and cryptocurrencies. 

GameStop and AMC weren’t the only stocks popular with ordinary investors that fell on Monday. Software company

Palantir Technologies

shares lost 1%, while U.S.-traded American depositary receipts for Chinese electric-vehicle maker NIO Inc. lost 9%.

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Companies that went public through SPACs, or special-purpose acquisition companies, also have struggled during the recent stock selloff. Hundreds of SPACs have been launched in the past two years, tapping into investors’ enthusiasm to buy anything and a flood of private startups looking to hit the public markets.

Now, shares of half of the companies that finished SPAC deals in the past two years, including commercial real-estate company

WeWork Inc.

and online lender

SoFi Technologies Inc.

, are down 40% or more from the $10 price where SPACs typically begin trading. WeWork lost 10% Monday. SoFi fell 4%. 

Shares of

Digital World Acquisition Corp.

, which is planning on merging with former President

Donald Trump’s

new digital-media venture—Trump Media & Technology Group—fell 8%.

Write to Sebastian Pellejero at sebastian.pellejero@wsj.com

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