Meme shares drop to start the new year

GameStop Corp. and AMC Entertainment Holdings Inc. Shares of Ltd. have fallen by 13% and 16%, respectively, in the first trading week of 2022. That’s a change from 2021, when so-called retail investors banded together to bullish stocks. GameStop and AMC, both struggling businesses when retail investors discovered them collectively last year, ended 2021 with gains of 688% and 1,183% for the year.

This year has not been so kind. Concerns about a potential interest rate hike have affected stocks and stocks of other growth companies, weighing on major indices. The technology-heavy Nasdaq Composite is down 3.5% for the month, while the broader benchmark S&P 500 is down 1.4%.

GameStop and AMC aren’t alone in their loss. Other stocks popular among individual investors have declined this week. US-traded US depository receipts for Mayme stock Bed Bath & Beyond Inc., software company Palantir Technologies Inc. and Chinese electric-vehicle maker NIO Inc. are down about 6% or more. Bed Bath & Beyond stock was up 9.2% premarket Thursday, despite announcing quarterly losses.

Gamestop and AMC, however, are facing losses that have outpaced most of their peers. Both companies are now trading at their lowest levels since last spring. GameStop closed Wednesday at $129.37. AMC ended at $22.75.

Individual investors have been active in the market in 2022, buying a net 3.9 billion US stock and exchange-traded funds in the first three trading days of the year, data from Wanda Research shows.

He also remains a net buyer of GameStop and AMC. Individual investors have bought about $1.8 million worth of GameStop and about $15 million of AMC shares on a net basis this year, data from Wanda showed Wednesday. However, the buying activity has been eclipsed by their interest in other stocks, including chip maker Advanced Micro Devices Inc. and Apple Inc.

Shares of GameStop and AMC were facing pressure even before the start of the new year. Both are down 25% or more from their levels three months ago. In December, GameStop said its quarterly loss had widened from a year earlier. AMC also disclosed that month that its chief executive officer, Adam Aaron, and its chief financial officer sold a combined $10.2 million of stock.

Even after the sale of shares on Wednesday, individual investors on social media forums seemed content to hold shares of both the companies. According to TopStonks.com, the two were ranked in the top-10 most mentioned top-10s on Reddit’s WallStreetBets forum before the US stock market opened on Thursday. In recent premarket trading, Gamestop added 1.6%, while AMC added 1.3%.

This story has been published without modification to the text from a wire agency feed