Breaking News
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

AMC and GME Stocks: Is the Party Over?

Stock MarketsJul 29, 2021 08:16
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
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.

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

AMC and GME Stocks: Is the Party Over?
 

Related Articles

Top 3 Best-Performing TSX Stocks in 2021
Top 3 Best-Performing TSX Stocks in 2021 By The Motley Fool - Sep 16, 2021

This week, the Toronto Stock Exchange (TSX) announced the 2021 TSX30™ – the 30 best-performing stocks of the past three years. Financial institutions, small-cap...

Is Suncor Stock a Buy?
Is Suncor Stock a Buy? By The Motley Fool - Sep 16, 2021

Whenever you’re looking to buy a Canadian energy stock, one of the top stocks you always have to consider is Suncor (TSX:SU)(NYSE:SU). There’s a reason why it’s...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email