After plunging another 15% on July 14, 2021, the price of AMC Entertainment stock has fallen to half of its record high. The movie theater chan’s stock tumbled 15% to $33.43 apiece on Wednesday. This is less than half of its all-time high of $72.62 in early June this year.
The price fall brought AMC’s month-to-date losses to 41%. Fellow meme stock companies, such as GameStop, are also down big in July.
Crypto space’s original meme stock king, GameStop, also fell more than 21% this month, with newcomers like Clean Energy Fuels and Clover Health plunging 22.6% and 34.8% in July respectively.
Despite the declines in these asset prices, AMC shares are still up more than 1,400% on the year, and GameStop still has a rally of over 780% in 2021 under its belt.
Earlier this year, short-sellers betting against these meme stocks suffered huge losses. However, they’re not changing their stand. In fact, data from S3 Partners suggests that the short interest in many of these speculative names has gone up in the last few weeks.
Over the past week, 13.8% of AMC’s float shares sold short after a 6.2% increase in shorted shares, according to S3 data. During the same period, the short interest in GameStop rose 9.4% to 13.3%, the same data said.
Any hope left?
Last week, AMC tabled a proposal to allow the company to issue up to 25 million more shares, a decision that followed several stock offerings in Q2 that raised $1.246 billion for AMC. Yet, the company still has a $4.5 billion net debt, according to estimates from Loop Capital Markets, and will have to pay cash for acquisitions, executive compensation, debt retirement.
However, as Alan Gould, an analyst at Loop Capital, says, “AMC has little hope of gaining significant market share.”
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GameStop has raised about $1.7 billion in recent stock sales. Its aim is to use the proceeds to accelerate its e-commerce transformation journey. Last month, the video game retailer said it was going to hire two high-profile executives from Amazon. Yet, many remained skeptical of the company’s ambition and ability to revive its dying business.
While investors believe that meme stocks could crash much like the dot-com and housing market bubbles of the previous decades, it’s still too early to conclude. For what it’s worth, these stocks could stage a comeback stronger than the markets have ever experienced.
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