The frenzied trading of “meme stocks” stretched into Friday - topping off two weeks of intense trading not seen since the start of the year.
Shares of the movie theater operator AMC which nearly doubled on Wednesday before falling sharply Thursday on share sale plans, zigzagged between gains and losses in early trading Friday, as did shares of retailer GameStop.
Software developer BlackBerry’s shares – which have more than doubled this year - sank as much as nearly 9% in early trading. Headphones maker Koss fell, too.
It was AMC that had captured the headlines this week as small-time investors hyped the stock in forums like Reddit’s WallStreetBets, a replay of the phenomenon that sent GameStop shares up 17-fold in January.
But analysts like Wedbush Securities’ Michael Pachter warn AMC shares are way overvalued.
“Raise capital by issuing shares, pay down debt and the fundamental value of the company goes up. But again, you know, I can't really get a valuation of much higher than $10 bucks a share. You know, I could maybe stretch it to $15 or $16. It's not worth $40 or $60.”
With retail investors now accounting for more than 80% of AMC's shareholder base, many institutional shareholders have said they were avoiding the stock.