AMC stocks drop sharply as investors sour on ‘meme-stock’ rally
The “meme-stock” reprise of 2022 took another beating on Monday as shares in the movie theatre chain AMC, one of the companies driven to dizzying heights by a social media-fueled investing frenzy last year, dropped sharply again as investors soured on its recent rally.
Shares of the world’s largest theater chain dropped 31% after the UK-owned rival Cineworld, operator of Regal cinemas in the US, warned of potential bankruptcy filing as it struggles to cut debts that soared during the pandemic.
The performance of the two cinema companies is strikingly different. AMC shares are up over 150% since the end of 2019 and it has been able to borrow $1.8bn, while Cineworld’s stock is down 99% over the same period and it has struggled to raise additional funding.
Separately, shares in the retailer Bed, Bath & Beyond – another stock favoured by meme investors who chased returns on Reddit and other social media platforms – have fallen more than 40% since Thursday, days after stock in the struggling housewares retailer more than doubled. The fall came after investor and “meme-lord” Ryan Cohen announced plans to sell off his position.
CNBC calculated that Cohen made as much as $59m from 9.8% investment in the company – a stake that has led thousands of online investors to follow his lead. Since 2015, stock in Bed, Bath & Beyond has dropped from $77 a share to around $10.
Both companies, along with the game retailer GameStop, are strongly associated with the meme-stop frenzy of 2021. The return of their popularity among small investors, perplexing to many, came as US markets have enjoyed a 20% rise in value since June when high inflation and rising interest rates triggered fears of an impending recession.
The fall in meme-stock values came
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