After surging by 179%, GME closely follows AMC in applying to sell up to 45 million shares

Seizing the opportunity of a big rise, "cashing out", is the rally of retail investors' stocks coming to an end?

After the frenzy of the past two days, GameStop plummeted 20% before the market opened on Friday. On the news front, GameStop released its first-quarter financial report and announced the sale of up to 45 million shares of Class A stock.

In the first quarter, GameStop's net sales were between $872 million and $892 million, a decrease from $1.237 billion in the same period last year. However, the loss narrowed, with a net loss between $27 million and $37 million, compared to $50.5 million in the same period last year.

At the same time, the company also stated that it has signed a public market sales agreement with Jefferies LLC, which may sell up to 45 million shares of Class A stock, with no significant changes in its financial condition.

After the announcement, GameStop's pre-market stock price fell, largely giving back the 179% increase earlier in the week. The stock fell 30% on Thursday and dropped 43.2% over the past two trading days, marking the largest two-day decline in 2021. However, it still accumulated an increase of over 50% for the week.

GME's loyal fans have always praised GME's clean balance sheet: debt is close to zero, with nearly $1 billion in cash.

Michael Pachter, an analyst at Wedbush who is outspokenly skeptical of GME, stated that if GME issues shares, it may signal to investors that the company acknowledges it's time to cash out.

AMC Entertainment fell 9.9% before the market opened on Friday, joining the recent volatile trend. Earlier this week, AMC took advantage of the rising stock price to exchange shares to reduce debt, claiming to have completed the previously announced stock issuance, significantly weakening the trading intensity that drove the rally this week.

Giacomo Pierantoni, Head of Data at Vanda Research, stated:

Retail investors have significantly reduced their purchases of GameStop and AMC. In the past two days, GameStop had an inflow of funds of about $5 million, while AMC's fund inflow on Thursday was "almost zero."

The surge in retail investors' collective holding of stocks this round is due to the return of Keith Gill, the top figure in the retail circle who ignited the stock frenzy in 2021 and then disappeared. On May 13, Keith Gill posted a meme image on X, showing a person leaning forward in a serious posture while playing a game, a tweet that seems to sound the battle horn once again