The meme trades of 2020-21 during the pandemic is a distant memory. In the last week, the renewed leg down for AMC Entertainment (AMC) and GameStop (GME) suggests their shareholders will lose more money by holding them.
AMC entered an equity distribution last Thursday, March 28. It will dilute shareholders by selling up to $250 million in common stock. Short-sellers have a 13.85% short float against the busted firm.
GameStop (GME), whose CEO and executives did not host a question and answer session after posting results, lost 12.5% last week. The seller of physical consoles and games on physical media does not have a working business model. Gamers may buy game titles digitally. Steam, Microsoft Store, and Epic Games stores are some of the channels available for buying new and old games.
Big Names on a Downtrend
In February, Nike (NKE) lost 10% in the month after posting Q3 results. Revenue of $12.43 billion is up by only 0.3% Y/Y. Growth investors are unwilling to pay 27.6 times a price-to-earnings multiple for a no-growth company. With inflation at around 4%, Nike effectively posted a negative real revenue growth.
In the pet drug manufacturing space, Zoetis (ZTS) risks trading toward a 52-week low. The European Commission is investigating the firm for possibly violating antitrust rules after acquiring another pipeline and terminating Librela. The firm did not transfer rights to development after terminating the therapy.
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