Shares of the movie theater firm have fallen 98% from their meme-stock highs of 2021.
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 AMC Entertainment, which said earlier this week it planned to sell up to 40 million shares at market prices.
GameStop shares 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. 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 expanding the amount of authorized shares and converting the units to common shares.
Newsletter Sign-up GameStop, meanwhile, faced an uncertain future before it became a meme stock. The firm had weathered executive turnover and a transition in the games industry to digital goods that presents an existential threat to GameStop. GameStop is once again facing similar odds, including a CEO firing earlier this year, though its balance sheet has improved with help from at-the-market stock sales after shares took off in 2021.
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