AMC and GameStop are the two fastest-rising meme stocks.
Amir Hamja/Bloomberg
AMC Entertainment Holdings shares have gone bonkers again.
They have more than doubled in price this week, aided by another run upward Friday. The moves have made the theater chain the fastest-rising so-called meme stock in a renewed hot phase for those shares.
Retail investors continue to pour money into shares of companies such as GameStop (ticker: GME), Bed Bath & Beyond (BBBY), and BlackBerry (BB). All three have exhibited big gains this week, but not because of changing views of the prospects for the businesses. Rather, traders who have been tracking the stocks on forums such as Reddit’s WallStreetBets are weighing in again, hoping to trigger gains that will force investors who have bet against the stocks to buy.
The tactic worked spectacularly well early in the year. Short-sellers were forced to close out their negative bets, sending the stocks into the stratosphere.
This week, AMC stock (AMC) is up roughly 160%. Helping that gain was a 17% move higher just on Friday. The stock’s run has cost short-sellers, who bet against the shares, a fortune. Short sellers were down a total of $2.36 billion year to date as of Friday, according to Ihor Dusaniwsky, managing director at short-selling analytics firm S3 Partners.
The run in AMC shares has been far greater this week than those for the other meme stocks. GameStop shares are up 44% this week, while Bed Bath & Beyond and BlackBerry are up 12% and 17%, respectively.
At just over $31 a share, the stock is about 15% below $35.86, a level it hasn’t closed at since March 2015. A 15% gain over the course of a year would be an impressive achievement for most stocks, but AMC has shown itself to be far more volatile.
Virtually all of the gains in the stock on Friday have come from buying by retail traders, rather than resulting from short-sellers closing their positions. Only a tiny slice of the transactions were from short-sellers buying the stock back. “We’re not seeing short covering in size, especially not relative to total volume,” Dusaniswsky said. “This run up is really long buying and selling.”
AMC and GameStop are the two most explosive performers among the meme stocks for the year. Both are up more than 1,000% year-to-date. GameStop’s run has cost short-sellers $6.7 billion in value for the year.
Sometimes earnings and normal valuation tools don’t matter. Don’t count these stocks out.
Write to Jacob Sonenshine at [email protected]
