Reddit’s Wall Street Bets is moving markets again with AMC Entertainment (AMC), Nokia (NOK), GameStop (GME), Virgin Galactic (SPCE) and Blackberry (BB).
In the four day stock rally in AMC stock, short sellers have lost more than $1.3 billion and across GME and AMC, their total is more than $2.7 billion of investment dollars lost.
This comes as the Reddit trading community and groups, including WallStreetBets, talked up the names on social media this week with #AMCSqueeze, #AMC, #AMC500k among active Twitter hashtags, which continued into Friday.
These so-called “meme” stocks have seen big gains this week as retail traders refocused on some of these names, particularly AMC, which has gained over 119%, while GameStop and Virgin Galactic are up over 40% apiece. That’s translated to heavy losses in each of these names.
It’s also true that social media users are exhibiting a lot of hype for AMC, and that their excitement once again seems divorced from the stock’s fundamentals. Analysts forecast that AMC’s revenues will nearly double in 2023 and 2023 as theaters reopen, but the company still expects to lose money this year and next.
One reason: Speculative retail investors have been on the hunt for new places to park their money as some of the air gets let out of cryptocurrency trades. Pierantoni observed that just as selling of bitcoin and ethereum picked up, retail purchases of AMC jumped — as did the number of people buying risky but bullish call options popular among Robinhood investors.