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Meme-trader enthusiasm may be helpful for raising cash through stock sales, but the buzz still hasn’t done enough for the companies’ bottom lines. That’s clear from GameStop’s new earnings report and from the latest moves at
which said earlier this week it planned to sell up to 40 million shares at market prices.
Fresh off a record closing low on Wednesday, shares of AMC Entertainment (ticker: AMC) set another milestone close Thursday, with shares down 5.8% to $8.12. The stock is down 98% from its record closing high of $339.05 in June 2021.
GameStop shares (GME) initially fell in Thursday morning trading, but ultimately closed 0.8% higher. The firm reported on Wednesday an adjusted quarterly net loss of $9 million.
Both companies saw shares surge in parts of 2021 as retail investors, and some hedge funds, piled into the firms’ highly shorted shares. The event has helped the firms amass cultlike interest from certain corners of Reddit and Twitter, where users speculate shares can surge again. Sometimes they do, though to lesser extents. Any gains are generally short-lived, though GameStop stock is still higher than its pre-meme stock levels.
AMC’s operational struggles were closely tied to the pandemic. Covid-19 shutdowns and a slower return to theaters weighed on the firm’s profits. But stocks sales—after the meme rally—helped it weather the storm. Though the firm hit a ceiling in how many shares it could sell without shareholder approval, it navigated around that by issuing preferred equity units to stockholders that voted in favor of…