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(Reuters) – Shares of retail front-runner AMC Entertainment struggled to reverse a recent string of losses on Thursday, as Wall Street debated the longevity of a stock trading frenzy that has gained huge success in the markets. social networks in 2020.
AMC shares recently rose 1.7% to $ 33.99 after four straight days of losses. The extremely volatile stock has lost more than half of its value since hitting a record high of $ 76.62 on June 2. On Thursday, the stock hovered between a low of $ 32.14 and a high of $ 37.40.
Shares of video game retailer GameStop, meanwhile, continued their recent drop and fell 3.1% to $ 162.34, from a peak of $ 344.66 in June.
Netflix announced Wednesday night that it has hired a former Facebook executive to run its video game unit as it ramps up efforts beyond its traditional streaming business, potentially adding competition for GameStop.
Cinema operator AMC and GameStop have been at the center of massive rallies of even stocks that have hurt bearish hedge funds and raised the profile of retail investors coordinating their purchases on websites like Reddit’s WallStreetBets.
While both have been sitting on big gains since the start of the year – AMC is up around 1,500% in 2021 and GameStop is up around 760% – their most recent slides have led some analysts to wonder if the retail fervor that has supported their actions is dying. down.
Retail investor purchases of meme stocks tracked by Vanda Research have declined sharply since early June, roughly reflecting the drop in the meme basket of stocks tracked by the company.
“Retail investors are slowly capitulating to memes stocks and prices fall as a result,” Vanda analysts said in a recent memo.
Meanwhile, Google’s searches for ‘invest’ and ‘buy stocks’ have fallen back to pre-pandemic levels, which DataTrek co-founder Nicholas Colas said was a worrying sign for the stock rally. even.
“Bubbles need fresh money, or they deflate. Quickly,” Colas wrote in a research note Thursday.
JPMorgan’s Peng Cheng, however, noted that AMC and other memes stocks saw “large” retail purchases last week, even though they declined.
Other popular social media stocks included Marin Software, which was down 26.5% on Thursday to $ 10.05, well below its 2021 peak of $ 27.26 reached on July 6, although ‘It’s still above the June 23 close of $ 1.71. Likewise, after massive spikes in trading volume that started in early June, ContextLogic last traded at $ 9.74 after hitting $ 15.18 in late June.
(Report by Sinéad Carew, Lance Tupper and Chuck Mikolajczak)
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