Directed by GameStop (NYSE:EMG) and AMC Entertainment (NYSE:CMA), meme stocks have made a big comeback recently. In fact, many beloved names have erased their 2022 losses and embarked on multi-day winning streaks.
What’s driving the Meme stock rally?
GME shares were boosted by the purchase of shares by a number of company insiders. AMC stock rose on the back of an unusual investment from the theater’s owner and a recent statement from its CEO that more such stocks are on the way.
Additionally, in recent days, meme stocks have rallied due to the rally in stocks in general and the resurgence in growth stocks in particular.
Learn more about GameStop and AMC
On March 22, GameStop Chairman Ryan Cohen paid $10.2 million to buy 100,000 shares of GME. Meanwhile, one of the company’s board members, Larry Cheng, bought 4,000 of its shares for $383,355 on March 21.
There is a well-known Wall Street saying that insiders only buy their company’s stock because they believe their stock will rise in the future.
As for AMC, the cinema operator has taken a 22% stake in a precious metals miner, Hydroft Mining (NASDAQ:HYMC), for $27.9 million. In a tweet, the CEO of AMC Adam Aron reported that Hycroft “owns 15 million ounces of gold!” And 600 million ounces of silver!
AMC plays on offense again with a bold diversification move. We just bought 22% of Hycroft Mining (NASDAQ: HYMC) from northern Nevada. It has 15 million ounces of gold resources! And 600 million ounces of silver resources! Our expertise to help them strengthen their liquidity. pic.twitter.com/LihqZguwnd
— Adam Aron (@CEOAdam) March 15, 2022
And yesterday Aron said Reuters that AMC would seek to complete additional “transformational” transactions.
The CEO called the Hycroft deal “bold”. Indeed, it is quite unusual for companies to invest in companies whose activities have no connection with their own.
Yesterday, AMC stock soared 45%, while GME stock jumped 25%. Other meme stocks that have rallied strongly in recent days include Bed bath and 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 are all still seeing an increase in interest and trading volume.
As of the date of publication, Larry Ramer had (neither directly nor indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com Publication guidelines.