GameStop, once at the center of the meme stock mania, tumbled 13.9% and brought its month-to-date losses to 30%. Shares of AMC fell 15.3%, pushing their monthly decline to over 31% and hitting their lowest level since June. Bed Bath & Beyond dropped 6.5%.
Other names that have been popular on Reddit’s WallStreetBets chatroom also saw steep losses this month amid the overall risk-off sentiment and heightened volatility. Clover Health has plunged 14.5% in December.
Still, Monday’s sell-off doesn’t make a huge dent in the meme stocks’ meteoric rallies this year. AMC shares are still up nearly 1,000% on the year, and GameStop has a rally of over 620% in 2021 under its belt. The rally has pushed GameStop to the Russell 1000 Index of large-cap stocks from the small-cap Russell 2000.
Earlier this year, a band of retail traders coordinated trades on social media and managed to create huge squeezes in a slew of heavily shorted stocks. The short interest in these names has come down drastically after the jaw-dropping episode.
The year-end selling could also be a sign that investors are losing patience, as AMC’s and GameStop’s turnaround plans fell short for many. As GameStop tries to transform from a brick-and-mortar chain into more of an e-commerce retailer, it has tapped a slate of new leaders — including former Amazon executives Matthew Furlong and Mike Recupero as CEO and COO, respectively.
However, GameStop’s new leaders have provided few details about their turnaround strategy and have yet to share an outlook.