AMC and GME Stocks: Is the Party Over?
The Motley Fool
Published Jul 29, 2021 08:00
Updated Jul 29, 2021 08:16
AMC and GME Stocks: Is the Party Over?
AMC Entertainment Holdings (NYSE:AMC) and Gamestop (NYSE:GME) haven’t been doing as well this week as they did in the past. As of this writing (Tuesday evening), both were down over the prior five trading days. AMC saw an extreme rally on July 19/20 but has been mostly trending down since then. Gamestop has followed much the same pattern.
With Reddit stocks like AMC and GME, you never know what’s going to happen. Despite talk of a future short squeeze that will send prices higher, it’s most forums and social media that are driving the prices of these stocks. The more attention bulls can get on Reddit and Twitter, the higher Reddit stocks are likely to go. This implies that if posters on these platforms lose interest before a short squeeze occurs, then AMC and GME are going to decline. In this article, I will explore the “Reddit stock” phenomenon and attempt to answer whether the party is truly over — or just in a lull for the moment.
AMC and GME trend downward Both AMC and GME shares traded trended down for the five trading days ended July 27. AMC was down 8.94% and GME was down 7%. By the standards of Reddit stocks, these aren’t huge losses. AMC at one point this month fell far more than that, before rallying 24% in a single day. With these stocks, 7-8% swings are just part of the territory. However, the trends as of this writing were not favourable to either stock.
What’s driving the price decline? It’s hard to say exactly what’s driving the price decline in AMC and GME shares, but we can make some educated guesses.
One obvious contributor is a decline in interest on Reddit. According to Docoh.com, neither AMC nor GME cracks the top three stocks on Reddit right now. Previously, both were WallStreetBets mainstays. If Reddit and WallStreetBets are losing interest in AMC and GME, then their shares will probably decline. That’s what we’re seeing now.
Another possibility is long-time holders selling. People who got into the meme stock craze early are sitting on some hefty gains, and it could be that they’re getting impatient waiting for the short squeeze and cashing out. If they did so, they probably wouldn’t tell their followers, who would see it as a betrayal. So, something of that nature could easily be going on.
Could BlackBerry be next? Although AMC and GME shares are both stagnating right now, another meme stock is worth thinking about.
BlackBerry (TSX:BB)(NYSE:BB) was one of the meme stocks that rose dramatically in January and again in June. It didn’t rise as dramatically as AMC or GME, but it posted some solid gains earlier in the year. At one point, it was trading at $32 — after starting the year at around $6.77. Today, BlackBerry trades for around $12 — it’s still up a lot, but it’s been a loser for Reddit stock traders who got in in late January. It’s Canada’s very own meme stock and — who knows? — maybe it will rise again once Redditors sour on AMC and GME.
Get The App
The post AMC and GME Stocks: Is the Party Over? appeared first on The Motley Fool Canada.
Fool contributor Andrew Button has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Twitter. The Motley Fool recommends BlackBerry.
This Article Was First Published on The Motley Fool
Written By: The Motley Fool
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.