The S&P 500 gained 2.3 percent for the week. AMC Entertainment, GameStop, and Robinhood Markets are among the stocks to avoid this week.
Last week should have been fantastic for AMC stockholders. Spider-Man: No Way Home had the second highest-grossing weekend in the country. In the middle of the week, AMC announced that it would reopen a couple of new theaters in locations previously operated by competitors, indicating that it will continue to gain market share. The multiplex operator successfully convinced its revolving credit facility lenders to extend the existing covenant holiday for an additional year. Despite this, the stock fell 2% during the holiday-shortened trading week.
This week isn’t going to be much better. Most films continue to perform dismally at the box office. Aside from a few superhero movies, consumers aren’t returning to the big screen. Even a highly anticipated action film, James Bond’s No Time to Die, had the lowest total gross of the five Daniel Craig-directed Bond films. It’s not a good sign when blockbusters are the exceptions. The stock was trading 61% below its all-time high set six months ago. The store is down for the fourth month in a row.
Last week’s edition of GameStop to this column paid off, as the stock fell 2% during a very positive week for the market overall. The stock has also lost more than half its value since its June highs. Most new GameStop investors have also lost money in the last seven months. GameStop will remember for the mother of all short squeezes that launched it into the stratosphere 11 months ago. It’s an entirely different scenario now.
This year has seen a slew of underwhelming initial public offerings (IPOs). However, one of the biggest flops has to be Robinhood Markets. Unlike AMC and GameStop, which are trading higher year to date, Robinhood Markets is trading close to its all-time low, which it reached just five trading days ago.
Robinhood Markets is in a state of emergency. The most recent quarter reported a sequential decline in funded accounts. Crypto trading is too limited and restrictive, and new option traders discover how difficult it is to win in a competitive market. It promises crypto wallets, account transfers, and even IRA accounts. However, it’s a prime candidate for selling pressure as people realize capital gains losses on the defunct trading platform.