shares of AMC Entertainment (AMC -1.33%, And GameStop (GME -2.66%, Both are falling in early Wednesday morning trading, leaving no specific news for mem stocks and more bullish sentiments are running counter to the broader market.
Where the movie theater operator was down 3.3% and the video game company was up 3.4% at 10:47 p.m. ET, the S&P 500 jumped 284-points for a 2.3% gain.
Both AMC and GameStop have been racking up more runs, but are now extending losses in two days. AMC enjoyed a rally for six days, while Gamestop saw its shares hit a high for nine.
The theater operator’s boom followed its second-quarter earnings report and announced that it would issue a new preferred stock to shareholders that would trade under the ticker symbol APE. AMC has said that it will use the stock to raise money as it has limited ability to do so under its common shares.
GameStop’s run-up was part of the return of the meme stock frenzy, in the form of fellow Internet stock chat room denizens bed Bath and Beyond (BBBY) -1.84%, Its shares also saw a rise for nine days.
Because meme stocks move more on social media than trading fundamentals, this kind of volatility is not uncommon.
AMC Entertainment investors, however, see the new preferred stock as a means to outperform short-sellers, who are committed to seeing the theater operator’s shares decline. In fact, AMC, GameStop, and Bed Bath & Beyond all remain heavily short stocks.
Some 18% of AMC’s outstanding shares are sold short, along with GameStop’s 24% and Bed Bath & Beyond’s 42%.
Rich Dupre has no position in any of the stocks mentioned. The Motley Fool does not hold any positions in any of the stocks mentioned. The Motley Fool has a disclosure policy.