Meme stocks slump to start new year


A U.S. stock market selloff is hitting shares of meme stocks particularly hard, dragging down companies that became favorites among individual investors last year.

Shares of GameStop Corp. and AMC Entertainment Holdings Inc. have tumbled in the first trading week of 2022, losing 13% and 16%, respectively. It’s a turnaround from 2021, when so-called retail investors banded together to send the shares soaring. GameStop and AMC, both struggling businesses when retail investors discovered them en masse last year, finished 2021 with gains of 688% and 1,183% for the year.

This year hasn’t been so kind. Concerns about likely interest-rate rises have clobbered highflying stocks and shares of other growth companies, weighing on major indexes. The technology-heavy Nasdaq Composite is down 3.5% for the month, while the broader benchmark S&P 500 has lost 1.4%.

GameStop and AMC aren’t alone in their losses. Other stocks popular among individual investors have slumped this week. Meme stock Bed Bath & Beyond Inc., software company Palantir Technologies Inc. and U.S.-traded American depositary receipts for Chinese electric-vehicle maker NIO Inc. are all down nearly 6% or more. Bed Bath & Beyond’s stock was up 9.2% premarket Thursday despite its announcement of a quarterly loss.

GameStop and AMC, however, are facing losses that have outpaced most of their peers. Both companies are now trading at their lowest levels since last spring. GameStop closed Wednesday at $129.37. AMC finished at $22.75.

Individual investors have remained active in the market in 2022, buying a net $3.9 billion of U.S. stocks and exchange-traded funds in the first three trading days of the year, data from Vanda Research shows.

They’ve remained net buyers of GameStop and AMC, too. Individual investors have purchased almost $1.8 million of GameStop and nearly $15 million of AMC shares on a net basis this year, data from Vanda through Wednesday shows. That buying activity, however, has been eclipsed by their interest in other stocks including chip maker Advanced Micro Devices Inc. and Apple Inc.

GameStop and AMC shares were facing pressure even before the new year kicked off. Both are down 25% or more from their levels three months ago. In December, GameStop said its quarterly loss had widened from a year ago. AMC also disclosed that month that its chief executive officer, Adam Aron, and its chief financial officer sold a combined $10.2 million of stock.

Even after the stocks sold off Wednesday, individual investors on social-media forums seemed content to keep holding shares of both companies. Both ranked in the top-10 most mentioned on Reddit’s WallStreetBets forum before the U.S. stock market opened Thursday, according to In recent premarket trading, GameStop edged up 1.6%, while AMC added 1.3%.

This story has been published from a wire agency feed without modifications to the text

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