By Dhirendra Tripathi
Investing.com – AMC Entertainment (NYSE:AMC) and GameStop (NYSE:GME) stocks, two of the biggest flagbearers of 2021’s meme stock rally, looked like extending losses Tuesday.
Shares of the multiplex-operator traded 7% lower in premarket while those of the videogame retailer were down 5%. They had closed around 15% and 14% lower, respectively, on Monday.
AMC is now down 68% and GameStop has 72% from their respective highs.
Both stocks have been favorites of retail investors this year, who have generated and ridden successive waves of momentum to make outsize returns on two stocks with challenging fundamentals. Such trading is likely to become more difficult as the Federal Reserve ends the pandemic-era of essentially free credit.
AMC's business has been badly hit by theater closures due to Covid in the last two years, while GameStop is only in the early stages of a pivot to a digitally-driven business model, while its brick-and-mortar business struggles with secular decline. Its third-quarter loss widened from a year ago.