The price of AMC Entertainment stock has been cut in half from its peak amid a big rout in meme stocks this month as the reality of bubble-like rallies and failing businesses started to become apparent for Reddit-obsessed investors.
The movie theater chain’s stock tumbled 15% to $33.43 apiece on Wednesday, less than half of its all-time high of $72.62 in early June. The decline brought its month-to-date losses to 41%. GameStop, the original meme stock king, has fallen more than 21% this month, while newcomers Clover Health and Clean Energy Fuels have plunged 34.8% and 22.6% in July, respectively.
While the pullback doesn’t make a huge dent in their monstrous 2021 rallies, it could be a sign that investors have begun to lose patience and rush for the exits as AMC’s and GameStop’s turnaround plans fell short for many. Meanwhile, their recent stock sales also diluted existing shareholders’ ownership to a great extent.
“While the declines in these asset prices has been rapid, their levels are still historically elevated, which could lead to further pain in the future,” Maneesh Deshpande, Barclays head of U.S. equity strategy and global equity derivatives, said of meme stocks in a note.
