Angela Weiss / AFP via Getty Images
Meme stocks
and
fell sharply on Wednesday, extending their losses for the fourth day in a row after weeks of sideways trading.
AMC stock (ticker: AMC) was down 9% to $45.52 Wednesday morning, while GameStop stock (GME) was down 7.5% to $184.56. Shares of
(BBBY) and
(BB), both stocks caught in the meme trade amid interest from Reddit users, were down about 4% each.
If Wednesday’s action holds, AMC stock will extend its recent losing streak to four trading days, its longest such streak since May 6 when it closed down for eight trading days in a row, according to Dow Jones Market Data. GameStop stock is on a similar skid, down its fourth consecutive trading day, the longest losing streak since May 5.
Still, AMC and GameStop are multiples higher than their levels in early May. AMC stock is up nearly 2,000% year to date, and GameStop stock is up about 860%. That said, both stocks have been on a downward trend since the beginning of June.
AMC and GameStop have seen relatively lower trading volume in recent sessions. AMC stock’s daily volume averaged at 87.7 million shares traded over the past 10 days, compared to an average of 170.7 million shares for the rest of 2021, according to Dow Jones Market Data. Likewise, GameStop volume averaged at 4.6 million shares traded daily over the past 10 days, compared to an average daily volume of 27.6 million for the rest of 2021.
There doesn’t appear to be news moving the stock, either. Moves in the shares of AMC and GameStop have tracked more closely with technical trading factors like options volume, short-seller interest, and social media-fueled momentum.
As Barron’s has noted, it would take very bold assumptions for AMC and GameStop to justify recent valuations. Many research analysts covering the stocks based on fundamental factors have struggled to do their jobs, with some dropping coverage altogether.
On Reddit forums, users are waiting for a MOASS, or “mother of all short squeezes,” that would send the meme stocks to new highs amid inflated demand from short sellers. Observers such as Michael Burry, of “The Big Short” fame, have predicted a crash for GameStop and other meme stocks.
Write to Connor Smith at connor.smith@barrons.com
