New York, NY – GameStop stock plummeted by more than 18% on Wednesday amidst a decline in the rally of meme stocks. The video game retailer had experienced a surge over the past two days, with shares skyrocketing more than 180% amid multiple trading halts due to volatility.

Similarly, AMC saw a 20% drop on Wednesday after a 95% increase in its shares over the previous two days. Other heavily shorted stocks, such as SunPower, Beyond Meat, and the Children’s Place, also faced declines on Wednesday.

The recent trading activity echoes back to early 2021 when Keith Gill, also known as “Roaring Kitty,” first sparked a meme stock frenzy with his bullish case on GameStop. Nicholas Colas, co-founder at DataTrek Research, highlighted the similarities to the 2021 short squeeze but noted that the recent movement is smaller in comparison.

Despite the significant losses suffered by short sellers during the previous meme stock rally, there was a persistence in betting against these companies despite the recent surge. Data from S3 Partners indicated a high short interest in GameStop, with nearly 24% of its shares being shorted.

On Tuesday, GameStop shorts incurred significant losses, with a total of $1.36 billion lost over two days. Analysts cautioned against getting caught up in the recent trading excitement, noting the low likelihood of a repeat of the 2021 meme stock madness.

The meme stock fever of three years ago attracted a wave of retail traders during the pandemic lockdowns. However, industry experts have expressed that the current trading environment differs significantly from the transformative period of 2021.

Matt Kohrs, a YouTuber who has been involved in GameStop and AMC trades, emphasized the ongoing theme of “the little guy versus the big guy” in the current short squeeze. The sentiment of challenging the existing power structures within the financial system has become a defining feature of the movement, particularly symbolized by GameStop.

As the rollercoaster ride of meme stocks continues, the evolving dynamics of retail trading and short squeezes are sparking debates on market regulations and the democratization of investing. The ongoing saga of meme stocks serves as a reminder of the power of collective action and the influence of retail investors in shaping market trends.