What happened
Meme stocks were on the move Friday with AMC Entertainment (AMC -1.24%) resuming its decline, falling 3% on the day and closing out the week down 25%, while fellow meme stocks GameStop (GME -2.40%) and Newegg Commerce (NEGG -3.58%) did better, rising 1.6% and 15.8%, respectively.
So what
The momentum that was holding AMC's stock aloft has weakened significantly in recent weeks, causing shares to lose more than half their value. There's been no specific cause for the falloff, but it's apparent the "diamond hands" the theater operator's "apes" have been brandishing are losing their luster. Still, AMC's stock is up over 260% over the last three months and is 1,600% higher year to date.
Image source: Getty Images.
GameStop's stock has also pulled back and is down 25% over the last four weeks, also on no news, though the video game stock arguably has better growth prospects than AMC.
Newegg, on the other hand, only recently went public through a reverse merger with a special purpose acquisition company, or SPAC, but was quickly adopted as a meme stock cause célèbre. As option trading became available, contracts were in short supply and traders sent the stock soaring to almost $80 per share.
While the tech-focused online retailer quickly returned to earth, losing over 60% of its value, today's bounce was based on no apparent company specific news.
Now what
Because trading in so-called meme stocks is not based on business fundamentals, shares are going to be volatile, rising and falling on market whims and the movements should be considered background noise.
