At the end of the day, AMC still lost $337.4 million in the first quarter. My instinct is that this is simply temporary good news that investors probably won’t be able to do much with. So what should investors take from all of this? What to Do with AMC Stock
Funnily enough, it was only a few months ago that GameStop earnings caused AMC stock to move quickly upward. Affecting Other Meme PlaysĪMC’s unexpected earnings beat caused GameStop (NYSE: GME) stock to unexpectedly shoot up more than 10% without any other news. According to the Wall Street Journal, the short interest in AMC stock is only very slightly below that 20% threshold. Otherwise, it is usually necessary for short interest to be above 20% for a short squeeze to be enacted. So, it is clear that AMC should now be on short squeeze watch given that unexpected good news has befallen the company. Short squeezes are typically triggered by unexpected good news that serves to drive a stock price upward, or a gradual buildup of buying pressure that outweighs selling pressure in the market. In fact, even accounting for the price surge, the stock has sloughed off more than 50% of its value this year. However, it must be noted that despite the upsurge based on the positive news, AMC stock remains down on the year. The company recorded 39.1 million people in attendance during the quarter, an increase from attendance of 6.8 million a year earlier. But AMC surprised everyone by posting a non-GAAP loss of 52 cents on revenues of $785.7 million.Īdditionally, on a year-over-year basis, attendance surged. The company was expected to post a non-GAAP loss of 63 cents per share on revenues of $743 million. The ongoing downward slide in growth and meme stocks makes the news especially noteworthy.ħ Undervalued Stocks to Buy Before Investors Catch OnĪMC beat consensus expectations on multiple fronts. With GameStop’s total NFT sales volume at just $18 million since the marketplace debuted, the growth opportunity ahead is still enormous.The most important news for AMC is that it surprised the markets positively with its first-quarter earnings beat. While GameStop’s NFT business may not be in great shape now, it can deliver if the company can find a way to turn it around. In a number of rounds, retail investors have won against Wall Street elites by sparking short squeeze in meme stocks like GME and AMC. In the past 30 days, 1.9% of the best-performing portfolios tracked by TipRanks increased their exposure to GME stock. TipRanks’ Stock Investors tool shows that investor sentiment is currently Positive on GameStop. Indeed, many retail investors are willing to bet against Wall Street when it comes to GME stock. GameStop remains one of the most discussed meme stocks on retail investor forums such as Reddit’s WallStreetBets and Stocktwits.
The average GameStop stock price prediction of $17.50 implies over 49% downside potential. According to TipRanks’ analyst rating consensus, GME stock is a Moderate Sell. However, Wall Street is not excited about the stock. Is GME a Good Stock to Buy?ĭespite the recent drop, GameStop stock is still up more than 40% over the past three months. The decline came on a generally bad day for meme stocks, as AMC Entertainment ( AMC) and Bed Bath & Beyond ( BBBY) also plunged nearly 42% and 16%, respectively. GameStop shares fell about 5.5% to $34.50 on August 22. The weakening crypto business comes as GameStop is also facing criticism for allowing the sale of copyright-infringing NFTs on its platform. GameStop’s NFT business has been on a decline in recent times, with sales volume, number of traders, and average item prices, all falling. The company charges a 2.25% fee on NFT trades that take place on its platform. On August 22, GameStop’s daily NFT fee revenue dropped below $4,000, according to DappRadar data. On the first day, for example, the company generated $44,500 in fee revenue on sales volume of $1.98 million. In GameStop NFT marketplace’s early days, the business boomed. GME stock spiked on the back of the NFT marketplace debut as investors cheered to welcome another crypto stock opportunity. In July, it moved to try its luck in the crypto space, launching a platform for trading NFTs. GameStop primarily operates a video game retail business. GME stock is taking the heat amid the shrinking NFT sales. It turns out that GameStop’s non-fungible token (NFT) marketplace sales that initially soared are now falling. Investors who rushed into GameStop ( GME) stock on hopes that the company’s crypto business would boom might need to rethink their strategy.