AMC shares bounce back while Gamestop tumbles down

Movie theatre chain, AMC Entertainment, witnessed a rebound in its shares of more than 6% to around $35 apiece after dropping 15% in the previous session. The price of the extremely volatile meme stock has dropped to half from its all-time high of $72.62 on June 2. 

On Thursday, the shares swung between a low of $32.14 and a high of $37.40. The stock fell about 37% in July alone amid a pullback in speculative names. GameStop, the original meme stock, is down nearly 25% this month.

Shares of the original meme stock, GameStop, continued falling and were down 3.1% at $162.34, compared with to the June high of $344.66. The videogame retailer is down nearly 25% this month.

Meme stocks are the ones whose rallies are driven by ordinary retail investors’ interest in the company, triggered through social media. The surge in the stock lasts only till the time they get attention and is a reflection of the hype it gets on social media.

AMC and GameStop have led the meme stock rally which was boosted by online portal’s such as Reddit’s WallStreetBets, leading to huge gains. AMC is up about 1500% in 2021 and GameStop is up around 760%, year-to-date. Their unexpected rise hurt bearish hedge funds but the recent tumbledown has raised questions regarding the fervor surrounding the stock.

Reuters quoted analysts who believe that retail investors coordinating their stock purchases via online portals seem to have acquiesced to the meme stocks resulting in the fall.

(Inputs from Reuters)

Picture Credits: Wall Street Journal