Two stocks that originally ignited the meme stock trading category seem to be back in vogue with the retail trading crowd. In just the last five trading days, shares of GameStop (NYSE: GME) and AMC Entertainment (NYSE: AMC) have jumped 29% and 19%, respectively. That sentiment continued Monday morning. After rising 6.5% early in the session, shares of GameStop were still 4% higher at 11:45 a.m. EDT. AMC stock jumped as much as 11% before paring gains to about 7% at that time. But not all meme stock names were being bought today. Shares of Canadian cannabis company Sundial Growers (NASDAQ: SNDL) were down almost 3%.
As the traders who have turned social media sites into groupthink engines for stock buying have shown previously, moves in these names dont necessarily correlate to any underlying business events. But in the case of AMC, a slow but steady return of movies and fans to theaters has at least provided some positive news for the company.
Image source: Getty Images.
A return to theaters is certainly good news for AMC. But the box office revenue on the most popular movies is still far below blockbuster levels seen pre-pandemic. This weekends No. 1 film was horror film Candyman, and it grossed only $22.3 million in theaters. That still counted as good news for the struggling theater operator. But that still doesnt really explain the moves seen in AMC and GameStop this past week.
Data by YCharts
In fact, neither AMC nor GameStop has really told investors how it plans to turn itself around. AMC CEO Adam Aron has embraced his companys role as a meme stock, and the company has been catering to its retail base of shareholders. Aron has engaged directly on social media, and the company launched AMC Investor Connect, which it said is an effort in relationship building with its shareholders.
The reality remains that the performance of these businesses isnt aligned with the stock valuations in many cases. Sundial Growers is still losing money, and though its gross cannabis revenue grew 8% sequentially in its recently reported second quarter, the company is still counting on an acquisition strategy to turn itself around.
GameStop hasnt clued investors in to how exactly it plans to recreate itself as an online retailer. That hasnt kept meme stock traders from holding up the share price, however. Perhaps more about its strategy will be revealed when GameStop reports its second-quarter financial update on Sept. 8.
10 stocks we like better than AMC Entertainment Holdings
When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now... and AMC Entertainment Holdings wasnt one of them! Thats right -- they think these 10 stocks are even better buys.
*Stock Advisor returns as of August 9, 2021
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the worlds greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The companys name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.
Find us at the office
Blotner- Kwas street no. 55, 39246 Canberra, Australia
Give us a ring
+78 715 483 676
Mon - Fri, 10:00-22:00