Meme stocks hit a wall on Thursday with GameStop, AMC and Clover down big
The WallStreetBets forum on the Reddit Inc. website on a laptop computer and the logo on a smartphone arranged in Hastings-On-Hudson, New York, US, on Friday, Jan. 29, 2021.
Tiffany Hagler-Geard | Bloomberg | Getty Images
The meme stock mania created by the day trading Reddit crowd fizzled a bit on Thursday.
It’s easy come, easy go for many speculative names favored by retail investors including AMC Entertainment and GameStop as they suffered double-digit losses on Thursday, pulling back from their recent explosive rallies. The video game retailer shed 27.2% even after announcing two high-profile executive hires from Amazon. The movie theater chain dropped 13.2% on Thursday, turning negative on the week.
Another red-hot meme stock Clover Health, which at one point was the focus of the WallStreetBets message board this week, pulled back 15.3% on Thursday. Clean Energy Fuels, which rallied more than 31% just Wednesday, tumbled 15.6%.
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On Thursday, GameStop investors seemed to be running for the exits after the company said it was appointed former Amazon executive Matt Furlong as its new CEO. It also picked another Amazon veteran, Mike Recupero, as chief financial officer. Meanwhile the company’s fiscal first-quarter results showed sales up 25% and a narrower loss than it reported a year ago.
The decline in stock came as GameStop also said it may sell as many as 5 million shares. Additional shares dilute the value of existing shareholders’ stakes. The stock is still up more than 1,000% on the year, however.
AMC is down for a second straight day after soaring 83% last week. The movie theater chain, which was on the brink of bankruptcy not long ago, managed to sell 20 million shares in two separate deals last week amid the rally, generating around $ 800 million in capital.
– CNBC’s Nate Rattner contributed reporting.
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