Meme Stocks AMC and GameStop Close at Lowest Point in Months
Are we witnessing an end to the meme stock craze?
In a week where the Federal Reserve, European Central Bank and Bank of England are all due to announce their latest interest rate decisions, two meme stocks made headlines on Monday – and not in a good way.
AMC and GameStop endured a difficult session yesterday, plunging 14% and 11% respectively, continuing a decline which began in November, and which sees both their month-to-date losses climb above 30%.
The sharp fall in both stocks came amidst a broader market sell-off yesterday, as concerns regarding the Omicron variant of Covid-19 persevere. However, AMC and GameStop were two of the bigger casualties, closing at their lowest levels since May and March respectively.
Despite recent performances, GameStop is still up more than 615% year-to-date (YTD), whilst AMC is not far off 1,000% for the year thus far.
These phenomenal gains came after armies of retail traders coordinated on social media sites and targeted the stocks, as well as various others, which were heavily shorted at the time.
However, shareholders of both companies have been recipients of bad news over the last week. In the case of AMC, Monday’s drop followed a fall of almost 7% on Friday, after the company’s CEO, Adam Aron, and CFO, Sean Goodman, sold more than $10 million worth of shares between them. CEO Aron had already sold around $25 million worth of shares in the previous month.
In total, Aron has reportedly sold 937,500 shares in a little over a month, taking his current position in the company down to just 96,000 shares, although this figure does not include 2.9 million shares which are issuable in the future based on performance targets. As for CFO Goodman, his sale on Friday accounted for all his 18,316 shares in the company - although, again – this number does not include a combined 589,000 shares which are issuable based on continued service and performance targets.
AMC Five-Year Performance:
As for GameStop, the company posted less than favourable quarterly results last week. Despite total revenue rising almost 30% year-on-year (YOY) to $1.3 billion, they reported a net loss of $105.4 million, or $1.39 per share, compared to a net loss of $18.8 million, or $0.29 per share, in the same quarter last year.
GameStop Five-Year Performance:
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