Meme Stock Status Ends For Bed Bath & Beyond, AMC Theaters
Two retail company stocks that had recently spiked in value despite the companies' woes — so-called meme stocks that gain temporary popularity because of social media — have crashed back down.
Home goods specialist Bed Bath & Beyond and movie theater operator AMC Entertainment Holdings both recently saw investors buy into their stocks in a big way, only to see the pattern soon reverse, similar to what happened to earlier meme stocks, such as GameStop.
Bed Bath & Beyond was trading a little above $10 per share on Monday morning, down from a social media-fueled peak on Aug. 17, when shares traded at $23.
As for AMC, the company was trading for a little more than $11 a share on Monday after peaking at $25 per share on Aug. 11.
Both companies' share prices to start the week were in line with what they were earlier in the summer, before the meme stock effect set in.
The Bed Bath & Beyond selloff started last week after its top investor started selling its stake in the company, and the AMC crash came not long after rival Cineworld Group was reportedly preparing to file for bankruptcy in the U.S. and its equivalent in the UK.
In July, Bed Bath & Beyond’s board fired its CEO after the company revealed first-quarter earnings that were well below Wall Street’s expectations, and sales were down 25% from last year.
“There are big questions about how [Bed Bath & Beyond] can turn things around when the inflationary environment is hurting their potential consumer,” AJ Bell analyst Danni Hewson told Bloomberg.
AMC's woes stem from the fact that movie theater patrons haven't returned to watch movies in the same numbers as before the pandemic, despite some blockbuster movies this summer. Also, the company is saddled with debt.
As of Q2 2022, AMC had more than $5B in long-term debt. Including lease obligations and other long-term liabilities, that figure rises to $10B, CNBC reports.
