AMC Entertainment Holdings Inc.
swung wildly on Thursday, extending a bout of volatility that has delivered deep cuts to small investors this week.
Shares in AMC rose nearly 10%, erasing losses from earlier in the day, when it fell almost 6% in premarket trading. The stock has retreated over 20% so far this week, making it one of the biggest losers as a red-hot rally in meme stocks began to fizzle out. GameStop edged up less than 1% on Thursday, capping its loss for this week at almost 12%.
Other big losers include
Clover Health Investments Corp.
, a company that rocketed up over 85% in a single day in June and has lost 35% in July. Its price was below $8 a share in mid May before shooting up to over $22, and traded Thursday at less than $9 apiece.
The precipitous downward trajectory for shares championed by individual investors on social media and in online forums underscores the fragility of the market for these small stocks. Retail trading has become a force in markets this year, as the combination of stay-at-home orders and the proliferation of free trading apps brought many people into stocks and options for the first time.
Coordinated trades on Reddit forums, with buyers encouraging each other to plow money into certain stocks, helped GameStop shoot up over 750% this year, while AMC is up more than 1470%. At the start of the year, GameStop was trading at less than $20 apiece, while AMC was priced at roughly $2. In comparison, the broader S&P 500 index has risen just over 16%.
Stocks that have more recently attracted attention from retail investors are also dropping, highlighting the volatile nature of the market.
Carver Bancorp Inc.,
a banking services company, is down to almost 30% this week after soaring 150% last week. The stock began June at about $9 apiece, and has since more than doubled.
Amid the recent slide, AMC revoked a plan last week for a shareholder vote to potentially issue 25 million more shares. It has issued over 100 million new shares since January and converted debt to equity.
“We’re canceling the July vote on more shares. And no more such requests in 2021,” Chief Executive
wrote in a July 6 tweet.
Many people are still believers in meme stocks despite the bumpy ride. A Reddit user with the handle u/Gold-Educational wrote “Not giving up on AMC, buying more” on Wednesday on the WallStreetBets forum. The person shared a screenshot of a portfolio of AMC shares, showing a total loss of 51%.
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