Send me real-time posts from this site at my email

Why AMC, GameStop, and Virgin Galactic Were Falling Today

What happened

Shares of AMC Entertainment (NYSE: AMC), GameStop (NYSE: GME), and Virgin Galactic (NYSE: SPCE) were all falling by mid-single-digit rates or more in morning trading Thursday even as the market indexes themselves were mostly flat as they digested the latest jump in jobless claims.

So what

The shares of these so-called meme stocks typically aren't tethered to business fundamentals or macroeconomic concerns, and today's moves don't seem tied to any specific company news either. Volatility is just how they do.

AMC was down 7%, GameStop was off 4%, and Virgin was declining 6.3%.

Image source: Getty Images.

Now what

Investors who've bought into these stocks shouldn't be wavering in their support. Although I think AMC is the weakest of the three, it does have the cash to survive for quite a while, so there will be plenty of time to panic-sell later on if the movie theater business just can't recover from the pandemic and the launch of so many movie streaming services.

GameStop has a lot to prove with the online-oriented business model that it's transitioning to, but there is a real chance it can do it. It has lots of cash, no debt, and a clearly defined goal of where it wants to go.

Virgin Galactic, for its part, is also a risky venture in that space tourism is not something that will be happening anytime soon. However, this week's launch of Jeff Bezos' Blue Origin into the under reaches of space, following the same sort of trip Virgin made a week ago, shows it could be a viable opportunity.

10 stocks we like better than AMC Entertainment Holdings
When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

They just revealed what they believe are the ten best stocks for investors to buy right now... and AMC Entertainment Holdings wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks

*Stock Advisor returns as of June 7, 2021

Rich Duprey has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.


Popular posts

Welcome! Is it your First time here?

What are you looking for? Select your points of interest to improve your first-time experience:

Apply & Continue