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:
Trade Stock CFDs with Admirals
With a Trade.MT5 account from Admirals, you can trade Contracts for Difference (CFDs) on AMC, GameStop and over 3,000 other shares! CFDs allow traders to attempt to profit from both rising and falling prices, whilst also benefiting from the use of leverage. Click the banner below to register for your account today:
INFORMATION ABOUT ANALYTICAL MATERIALS:
The given data provides additional information regarding all analysis, estimates, prognosis, forecasts, market reviews, weekly outlooks or other similar assessments or information (hereinafter “Analysis”) published on the websites of Admirals investment firms operating under the Admirals trademark (hereinafter “Admirals”) Before making any investment decisions please pay close attention to the following:
- This is a marketing communication. The content is published for informative purposes only and is in no way to be construed as investment advice or recommendation. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.
- Any investment decision is made by each client alone whereas Admirals shall not be responsible for any loss or damage arising from any such decision, whether or not based on the content.
- With view to protecting the interests of our clients and the objectivity of the Analysis, Admirals has established relevant internal procedures for prevention and management of conflicts of interest.
- The Analysis is prepared by an independent analyst Roberto Rivero, Freelance Contributor (hereinafter "Author") based on personal estimations.
- Whilst every reasonable effort is taken to ensure that all sources of the content are reliable and that all information is presented, as much as possible, in an understandable, timely, precise and complete manner, Admirals does not guarantee the accuracy or completeness of any information contained within the Analysis.
- Any kind of past or modelled performance of financial instruments indicated within the content should not be construed as an express or implied promise, guarantee or implication by Admirals for any future performance. The value of the financial instrument may both increase and decrease and the preservation of the asset value is not guaranteed.
- Leveraged products (including contracts for difference) are speculative in nature and may result in losses or profit. Before you start trading, please ensure that you fully understand the risks involved.