The meme stock mania created by the day trading Reddit crowd fizzled a bit on Thursday.
It be easy advance, easy paddle for many speculative names favored by retail investors including AMC Entertainment and GameStop as they suffered double-digit losses on Thursday, pulling back from their latest explosive rallies. The video game retailer shed 27.2% even after announcing two high-profile executive hires from Amazon. The movie theater chain dropped 13.2% on Thursday, turning negative on the week.
Another pink-hot meme stock Clover Health, which at one level was the level of curiosity of the WallStreetBets message board this week, pulled back 15.3% on Thursday. Clean Energy Fuels, which rallied more than 31% superb Wednesday, tumbled 15.6%.
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On Thursday, GameStop investors appeared to be working for the exits after the company said it appointed archaic Amazon executive Matt Furlong as its original CEO. It also picked another Amazon veteran, Mike Recupero, as chief financial officer. Meanwhile the company’s fiscal first-quarter outcomes confirmed sales up 25% and a narrower loss than it reported a year ago.
The decline in stock came as GameStop also said it may promote as many as 5 million shares. Additional shares dilute the value of original shareholders’ stakes. The stock is smooth up more than 1,000% on the year, nonetheless.
AMC is down for a second straight day after soaring 83% last week. The movie theater chain, which was on the brink of bankruptcy no longer long ago, managed to promote 20 million shares in two separate deals last week amid the rally, generating around $800 million in capital.
— CNBC’s Nate Rattner contributed reporting.
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