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What Is Going on With GameStop (GME) Stock Today?

Investor Place · 11/15/2022 15:39

Despite a bit of pressure now as the rest of the market declines, GME stock is holding up nicely. So what's driving the gains? The same thing that always seems to drive this stock higher: meme momentum.

Shares of AMC Entertainment (NYSE:AMC) stock are also up more than 5% — and were up almost 12% earlier in the day — after comments from CEO Adam Aron.

Specifically, he said the company can acquire more theaters and that AMC will continue to accept crypto despite the crypto selloff. "We are not taking cryptocurrency risk ... We convert it into dollars almost immediately as soon as we take the crypto."

What Does AMC Have to Do With GME Stock?

Ever since the meme-stock rally of last year, these two stocks have been joined at the hip. Not that they have a direct 1-to-1 correlation, but AMC stock and GME stock tend to trade in correlation with one another.

Lately, though, the gains in AMC have been much more pronounced. AMC shares have exploded 65.4% from last week's low, while GME stock is up 29% in the same stretch.

Remember, it's not a 1-to-1 correlation. However, they do tend to trade together. With last week's better-than-expected inflation report, we've seen an influx of capital being put back to work in "risk-on" assets. That, of course, has included the meme stocks like AMC and GameStop. Where they go from here is anyone's guess.

The fact that GME stock appears to be rallying on AMC's good news — and that "good news" is being driven by maybe buying some struggling theaters and continuing to take crypto — does not seem like a sustainable catalyst for GameStop.

That said, if the momentum remains with tech stocks and equities as a whole, then GME stock and others can continue to rally too.

On the date of publication, Bret Kenwell did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell.

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