Opinion: Meme shares continue to fall as retail investors digest so much news
Adam Aron might want to put the popcorn down and Ryan Cohen might want to keep tweeting.
Actions in AMC Entertainment AMC,
closed down 6.9% on Friday, ending a very tough week for the stock after its memelord CEO sold another large slice of its AMC stock and made the rare decision to disappoint its retail investor shareholders by paying publicly cold water on a very popular site. plan to protect the stock from short sellers.
AMC revealed in an SEC filing Thursday afternoon that Aron and its CFO Sean Goodman recently sold 312,500 and 18,316 insider shares, respectively. In total, the two leaders cashed in just over $ 10 million.
This is Aron’s second major insider sale in as many months, from which he appears to have pocketed more than $ 30 million. For its part, Goodman no longer owns any active AMC shares.
For AMC “Apes” which “HODLed” across the 2021 fan, watching senior executives get liquid from a stock they rocket fueled more than 1,200% in 2021 has sparked introspection. on social networks.
“The monkeys literally give money to hedgies and crap c-suites,†one user posted on r / WallStreetBets.
“The guy takes it and leaves the bag with you,” replied another.
Still, many others have defended sales of Aron shares, reminding fellow ape that Aron told investors he would sell shares for estate planning purposes during the 8’s earnings call. November of the company.
Not helping Aron’s case with enemies was his Thursday morning tweet in which he attempted to quell a viral theory backed by financier Marc Cohodes that AMC should offer a token NFT dividend that would prevent short sellers from getting their hands on AMC stocks.
“It’s probably illegal, violates our covenants and / or puts AMC at huge litigation risk,” the Aron tweet read. “We can’t do it.”
Aron’s cold shower sparked some frustration among many who had spent weeks supporting the plan and caused public drama on Twitter between Cohodes and a Twitter influencer who had worked with him to publicize the plan.
It also caused AMC shares to fall more than 10% at one point on Friday and gave another glimpse of the schism between Apes supporting AMC and those loyal to Mother Meme’s other stock.
“There is a huge difference between AMC and GME,†posted one user on r / WallStreetBets. “Only one of them had the potential for something incredible.”
And speaking of GameStop GME,
it also fell 4.3% on Friday, continuing its fall after the company’s quarterly earnings report on Wednesday revealed a 30% increase in earnings but a significantly widened loss per share, once again giving retail investors a Rorschach’s financial test to decide how painful the video game retailer’s ecommerce transformation will be versus how much they “love the stock.”
Throughout 2021, GameStop stock rebounded from declines after earnings as retail investors crowded to buy stocks that they bragged online was a discount provided by hedge funds from Wall Street, but entering the last hour of trading on Friday, the stock was down more than 10% for the week.
Overall, the mood around the memes was pretty dismal.
Enter Ryan Cohen.
“I’m cooler online than in real life,” tweeted the activist investor turned GameStop chairman / retail investor folk hero at 2:55 p.m. EST.
As of the time this tweet was posted, GameStop shares climbed 6.3% to close at 2% on the day and cauterized the company’s losses at 4.2% for the week.
It’s also a testament to the power Cohen has in the GameStop movement, a stark contrast to the suddenly damaged armor worn by Aron.
DOJ Gives Reddit Anticipated Christmas Giveaway With Short Sale Investigation
Retail investors were also excited by a report that the US Department of Justice is investigating certain short sellers.
And while it doesn’t appear that the DoJ is specifically looking at which memes stocks or short sellers’ funds retail investors hate the most, the investigation would focus on how shorts engage with them. researchers and publish their findings to influence the movement of the stocks they bet on. against, which is also of interest to retail investors.
But there was more than enough smoke this week to show that even equity investors need to start being very cautious about what to come in 2022.
Friday’s new inflation data alone shows that the Federal Reserve will need to raise interest rates in 2022 and start ending the opioid addiction to cheap money that has gripped U.S. markets since. over a decade.
This era also created the perfect incubation for memes stocks, fostering the growth of commission-free trading apps, the dark pools that back them up, and algorithmic trading that turned the outward sentiment of individual day traders into huge market insurgencies. Marlet.
Once the Fed starts to shrink, it will become increasingly difficult for Ryan Cohen’s tweets to save a trading day.