GameStop stock (GME) tanked about 35% Wednesday as a recent rally among meme names faded. Shares of the video game retailer are coming off a two-day short squeeze. GameStop stock gained more than 180% in the prior two sessions.

AMC (AMC) also fell more than 25% Wednesday after shares of the theater chain operator rose 95% over the last two days.

Other heavily shorted stocks that dropped Wednesday included SunPower (SPWR), Beyond Meat (BYND), and the Children’s Place (PLCE).

GameStop shares surged Monday after the reemergence of Keith Gill, also known as “Roaring Kitty,” whose bull case on GameStop ignited the meme stock rally back in 2021.

In a note to clients, Nicholas Colas, co-founder at DataTrek Research, wrote this recent trading action “feels like an echo of early 2021, when this account helped fuel a vicious short squeeze in GameStop.”

Colas noted that the move back in 2021 was quite a bit larger than what we’ve seen so far this time around, with GameStop stock rising 1,500% in January 2021 before forfeiting most of those gains.

The pain short sellers endured during the original meme stock rally three years ago didn’t deter bets against these companies in recent days.

Keith Gill, known in social media forums as Roaring Kitty, testifies during a virtual hearing on GameStop in Washington, Feb. 18, 2021. The man at the center of the meme stock craze during the pandemic returned to the social platform X for the first time in three years on Sunday. (House Financial Services Committee via AP, File)

Keith Gill, known in social media forums as Roaring Kitty, testifies during a virtual hearing on GameStop in Washington, on Feb. 18, 2021. (House Financial Services Committee via AP, File) (ASSOCIATED PRESS)

Short interest in GameStop remained elevated since that meme rally, data from S3 Partners showed, with almost 24% of the float.

GameStop shorts were down $1.36 billion on Tuesday after losing almost $900 million on Monday.

“We are seeing continued squeeze related short covering due to the rebirth of the meme trade,” said Ihor Dusaniwsky, managing director of S3 Partners.

On Tuesday, Wall Street strategists warned the fresh burst of enthusiasm is far from the madness of three years ago, with “low” chances of a 2021 repeat.

GameStop stock tumbled on Wednesday, indicating the rally in meme names is fading. (AP Photo/John Minchillo, File)

GameStop stock tumbled on Wednesday, indicating the rally in meme names is fading. (AP Photo/John Minchillo, File) (ASSOCIATED PRESS)

The meme frenzy three years ago garnered national attention, attracting an army of retail traders during the pandemic lockdowns.

“I don’t look at this at all like I did in 2021 when it was almost a transformational moment, dragging, you know, tens of millions of people back into the marketplace,” said Tom Sosnoff, CEO of tastylive, an options and futures trading platform.

On Tuesday, YouTuber Matt Kohrs, who has held positions in GameStop and AMC in the past, said the pivotal aspect of “the little guy versus the big guy” during the short squeezes of 2021 holds true today.

“The perception is that the entire system is set up and insulated to benefit the powerful elite. GME is the symbol of the populist movement against that concept,” said Kohrs.

“The only true change I see from a psychology standpoint is not being locked inside anymore,” he added.

Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on Twitter at @ines_ferre.

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