[ad_1]
Text size
Popcorn at the AMC Town Square 18 theater in Las Vegas.
Ethan Miller / Getty Images
AMC Entertainment Holdings
and
GameStop
stocks closed in the green, ending their recent slippage. Earlier on Thursday, the top two memes were set for their fifth straight trading day decline.
AMC stock (ticker: AMC) closed up 6.4%, at $ 47.94 on Thursday.
GameStop
(GME) rose 0.4% to $ 191.38. the
S&P 500 Index
was down 0.9%.
The gains cut short the longest losing streak of the two stocks in two months, when AMC fell for eight consecutive trading days ending May 6, and GameStop fell for five consecutive trading days ending May 5. . Both stocks posted below average levels on a daily basis. volume over the 10-day period ending Wednesday compared to the rest of the year, according to Dow Jones Market Data.
AMC succeeded in skewing the universe of small caps in the first half of the year by dominating the
Russel 2000
index, Christopher Harvey, head of equity strategy at Wells Fargo Securities, wrote in a note on Thursday. Long-only small and mid-cap managers who weigh stocks based on fundamentals lagged the Russell 2000, in part because of the AMC. Small-cap quantitative funds have also been hampered by their cheaper portfolio tilt due to AMC, he noted. On the other hand, funds that have underweight AMC will fare better amid the recent decline.
AMC and GameStop were both targeted by Reddit users in January due to high levels of short selling. Stocks soared amid a trading windfall that was likely fueled by a mix of factors including dynamic trading, high volume of options and viral social media chatter. Shares of both companies erupted again at the end of May.
The business oddities continued, prompting some analysts who hedge companies based on fundamentals like expected cash flows, not short-term hopes, to stop hedging those stocks entirely. Wacky exchanges aside, analysts said institutional investors, their main clients, were not interested in researching these companies. Michael Burry, the “Big Short” investor who bet on GameStop in 2019, once said Barron he believes GameStop and other memes stocks will fall apart at the expense of average investors.
They traded mostly sideways in the weeks leading up to their last skid. AMC earlier this week withdrew a plan to ask shareholders to vote on the authorization of 25 million new shares. If approved, the company could have sold new shares from 2022 to raise funds to reduce debt and consider acquisitions. GameStop has declined in the weeks since the release of fiscal first quarter results on June 9.
Write to Connor Smith at [email protected]
[ad_2]
Source link