The leading meme stocks have been on a multiday rip higher. In contrast to the more upbeat broader market, shares of AMC Entertainment ((AMC 7.56%) and GameStop (GME -2.67%) are both sliding in morning trade on Wednesday. This decline isn’t due to any news related to the meme stocks. At 10:47 a.m. ET, the S&P 500 had risen 284 points, or 2.3%, while the operator of movie theatres was down 3.3%, and the maker of video games was down 3.4%.
AMC and GameStop are extending losses over two days after long upward trends. AMC experienced a six-day gain, while GameStop experienced a nine-day surge in share price.
The theatre operator’s stock price increased after the release of its second-quarter results report and the news that it would be issuing new preferred shares for stockholders that would trade under the ticker symbol APE. AMC has declared that it will use the stock to raise capital because its capacity to do so under its common shares is constrained.
GameStop’s run-up was a part of a comeback of the meme stock frenzy, as Bed Bath & Beyond (BBBY 1.14%), another frequenter of online stock chat rooms, also saw its shares soar higher for nine days.
This kind of volatility is widespread since meme stocks frequently fluctuate more in response to social media attention than objective business factors.
However, AMC Entertainment’s investors see the new preferred stock as a way to trick short-sellers who are still determined to see the theatre operator’s shares decline. In actuality, shares of AMC, GameStop, and Bed Bath & Beyond are still all severely shorted. Around 18% of AMC’s outstanding shares, 24% of GameStop’s shares, and 42% of Bed Bath & Beyond’s shares are all sold short.
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Why AMC Entertainment And GameStop Are Rising Together Again?
Shares of AMC Entertainment (NYSE: AMC) and GameStop (NYSE: GME), the dynamic pair of meme stocks, are trading together again this morning. At 10:37 a.m. ET on Thursday, the operator of movie theatres is driving meme stocks higher with its shares up 8.3%, compared to a more modest 1.1% gain for the retailer of video games. Even Bed Bath & Beyond (NASDAQ: BBBY), whose shares rose 7.2% this morning, is participating in the rise.
Since AMC stated it was establishing a preferred share of stock that would be granted to investors on a one-for-one basis based on the number of shares of common stock they possess, meme stocks have come back to traders’ attention. They had previously gone out of favor. Continue to read
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