Medha and Anisha Singh

(Reuters) – Meme stocks GameStop Corp AMC Entertainment (NYSE 🙂 and (NYSE 🙂 continue to lose favor with investors, as concerns about a quicker rise in interest rates limit the potential for speculative trading.

GameStop’s stock price jumped 600% in the last year during a retail trading frenzy. On Monday, it fell 11%, continuing a slide of 28% since 2022. AMC lost three-quarters of its value this year, following an increase in revenue by more than 1,100% since 2021.

An army of small-time investors gathered on Reddit’s forum r/wallstreetbets to coordinate their efforts, increasing the stock market value and weakening bearish hedge funds.

Thomas Hayes is a managing member of Great Hill Capital. He stated, “As interest rates rise, future cash flows’ present value decreases. This takes some of our speculation out of market.”

U.S. stocks have suffered their worst week in eight years since March 2020 when the pandemic began. This is because a rising cost of borrowing could signal that the policy of easy money, which has fueled stock market rallies in recent weeks, will end.

Hayes explained that “there was a period where there was all the free stimulus money as well as low rates of interest and margin availability.. that’s ending.”

Others stocks which have attracted retail investor interest also dropped. Koss Corp (NYSE:) Avis Budget (NASDAQ:) Group Inc., Workhorse Group Inc. Bed Bath & Beyond Inc (NASDAQ:) This month, the stock price of (NASDAQ:), has fallen between 14% to 36%.

Roundhill’s MEME ETF has seen its exposure to stocks that have high short-term interest drop in six out of seven weeks.

Joe Saluzzi (co-manager for trading at Themis Trading, New Jersey) said that meme stocks held up longer than expected.

Vanda Research (NASDAQ:) Research which tracks retail investor flows said last week that overall chatter about meme stocks had dropped significantly from the early 2021s, although there was some speculative retail investor interest in AMC and GameStop.

Fidelity clients ranked the stocks among their top 10 most-traded on Friday. Buy orders outnumbered sell orders by a wide margin.

The latest Ortex data showed that short interest, as a percentage for each stock’s free float, has risen to around 20%. Around 16% of AMC’s shares and 11% were in short positions at the end October.