Why AMC Entertainment, GameStop, and Sundial Growers All Sank

Motley Fool2022-01-06

What happenedShares of meme stocks AMC Entertainment(NYSE:AMC),Gamestop(NYSE:GME), and Sundial Growers(NASDAQ:SNDL)all fell hard on Wednesday following the release of minutes of the Federal Reserve ...

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Comments

spj
2022-01-06
spj
Unfortunately The Fool had only these 3 stocks in his watchlist. Had there been some additional stocks, he wud hv known that, those also sank yesterday along with the whole market. Poor thing!
Skai
2022-01-06
Skai
In year 2022, Mfool continues to be a joke. Hope DOJ will investigate on them soon.$AMC Entertainment(AMC)$$GameStop(GME)$
DragonKC
2022-01-06
DragonKC
Nothing is confirmed yet unless Fed in real action. Hope is not lost unless you lose hope.
Bernard
2022-01-06
Bernard
Manipulation lah if not what if amc finds cure to cancel to +10% tmr -20%
LucasSSS
2022-01-06
LucasSSS
We buy, we hodl 🦍
AA23
2022-01-06
AA23
Ok

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Countmeme stocks and cannabis stocks, which are generally unprofitable, as part of that risk-on group as well.On Wednesday, the Federal Reserve released minutes from its December meeting. While officials had already announced a tapering of bond purchases and expectations for several rate hikes this year, the minutes revealed the possibility for even more aggressive moves. Several officials thought the Fed could shrink its balance sheet of Treasuries and mortgage-backed assets, which it has been buying for some time to nurse the economy back to health. Tapering asset purchases merely suggested the Fed would be buying fewer securities but would still be purchasing. Letting the balance sheet shrink would be an indicator of even tighter financial conditions than that.Exacerbating matters, the December private payrolls grew by 807,000, a much higher number than anticipated. This further indicated a strong economy which could necessitate a quicker tightening.Good news on the economy usually means good news for stocks, but rising interest rates can also lower valuations. While some cyclical sectors, like financials and energy names, did relatively well today, highly priced or speculative stocks such as AMC, GameStop, and Sundial, which are \"story\" stocks with negative earnings, sold off hard.While the economic reopening would benefit AMC, higher rates could also be a killer. CEO Adam Aron said in recent days he had hoped to refinance some of AMC's high-yield debt it had to take on during the pandemic to ensure its survival. However, if interest rates go up quickly, it will be harder to refinance at meaningfully lower rates.Now whatAll three stocks are down more than 50% off their 52-week highs, but there's a good argument to be made these three names are still overpriced. All three are unprofitable, with AMC's results still significantly in the red, in part thanks to high-interest payments despite theater reopenings.GameStop has been bid up on hopes of a turnaround under the leadership of large investor and current chairman Ryan Cohen. But that effort is still in its nascent stages, and GameStop's legacy business in physical games is still declining, so there is a high degree of uncertainty. And Sundial is a penny stock in a difficult cannabis market in Canada, with a still-expensive valuation of 23 times sales and little visibility into when it may be profitable.The bottom line is, just because these stocks are down a lot doesn't mean they can't go down further. I'd stay away from all three amid this tightening cycle unless you have a small portion of your portfolio you can afford to lose completely on speculative bets.","kind":null,"is_publish_news":true,"is_publish_highlight":true,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[{"id":9008255424,"gmtCreate":1641469543637,"gmtModify":1676533618133,"author":{"id":"3577478273531959","authorId":"3577478273531959","name":"spj","avatar":"https://static.laohu8.com/default-avatar.jpg","vip":1,"crmLevel":5,"crmLevelSwitch":0,"idStr":"3577478273531959","authorIdStr":"3577478273531959"},"htmlText":"Unfortunately The Fool had only these&nbsp;3 stocks in his watchlist. Had there been some additional stocks, he wud hv known that, those also sank yesterday along with the whole market. Poor thing!","listText":"Unfortunately The Fool had only these&nbsp;3 stocks in his watchlist. Had there been some additional stocks, he wud hv known that, those also sank yesterday along with the whole market. Poor thing!","text":"Unfortunately The Fool had only these 3 stocks in his watchlist. Had there been some additional stocks, he wud hv known that, those also sank yesterday along with the whole market. Poor thing!","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9008255424","repostId":1148312978,"repostType":2,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9008238575,"gmtCreate":1641448875527,"gmtModify":1676533616707,"author":{"id":"3581985274026406","authorId":"3581985274026406","name":"Skai","avatar":"https://community-static.tradeup.com/news/895ee4bbfa814435328502a50bbee0a7","vip":1,"crmLevel":2,"crmLevelSwitch":0,"idStr":"3581985274026406","authorIdStr":"3581985274026406"},"htmlText":"In year 2022, Mfool continues to be a joke. Hope DOJ will investigate on them soon.<a href=\"https://ttm.financial/S/AMC\">$AMC Entertainment(AMC)$</a><a href=\"https://ttm.financial/S/GME\">$GameStop(GME)$</a>","listText":"In year 2022, Mfool continues to be a joke. Hope DOJ will investigate on them soon.<a href=\"https://ttm.financial/S/AMC\">$AMC Entertainment(AMC)$</a><a href=\"https://ttm.financial/S/GME\">$GameStop(GME)$</a>","text":"In year 2022, Mfool continues to be a joke. Hope DOJ will investigate on them soon.$AMC Entertainment(AMC)$$GameStop(GME)$","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":11,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9008238575","repostId":1148312978,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9008299363,"gmtCreate":1641443993781,"gmtModify":1676533616347,"author":{"id":"3577178099298017","authorId":"3577178099298017","name":"DragonKC","avatar":"https://static.tigerbbs.com/f90c63c67a4e5f91e9dc0159f5b853ab","vip":1,"crmLevel":1,"crmLevelSwitch":0,"idStr":"3577178099298017","authorIdStr":"3577178099298017"},"htmlText":"Nothing&nbsp;is confirmed yet unless Fed in real action. Hope is not lost unless you lose hope.&nbsp;","listText":"Nothing&nbsp;is confirmed yet unless Fed in real action. Hope is not lost unless you lose hope.&nbsp;","text":"Nothing is confirmed yet unless Fed in real action. Hope is not lost unless you lose hope.","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9008299363","repostId":1148312978,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9008206832,"gmtCreate":1641442445743,"gmtModify":1676533616160,"author":{"id":"3574882012140918","authorId":"3574882012140918","name":"Bernard","avatar":"https://static.tigerbbs.com/d01914291d9fd02b1bb32b6294e9720a","vip":1,"crmLevel":2,"crmLevelSwitch":0,"idStr":"3574882012140918","authorIdStr":"3574882012140918"},"htmlText":"Manipulation lah if not what if amc finds cure to cancel to +10% tmr -20%","listText":"Manipulation lah if not what if amc finds cure to cancel to +10% tmr -20%","text":"Manipulation lah if not what if amc finds cure to cancel to +10% tmr -20%","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9008206832","repostId":1148312978,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9008208949,"gmtCreate":1641442060821,"gmtModify":1676533616145,"author":{"id":"3566251269168774","authorId":"3566251269168774","name":"LucasSSS","avatar":"https://static.tigerbbs.com/a02c66653ba9a547638352e54aa53885","vip":1,"crmLevel":1,"crmLevelSwitch":0,"idStr":"3566251269168774","authorIdStr":"3566251269168774"},"htmlText":"We buy, we hodl 🦍","listText":"We buy, we hodl 🦍","text":"We buy, we hodl 🦍","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9008208949","repostId":1148312978,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9008200401,"gmtCreate":1641441057266,"gmtModify":1676533616071,"author":{"id":"4098879381617960","authorId":"4098879381617960","name":"AA23","avatar":"https://static.tigerbbs.com/e6d21140696c12bece250857ee21bd8f","vip":1,"crmLevel":5,"crmLevelSwitch":0,"idStr":"4098879381617960","authorIdStr":"4098879381617960"},"htmlText":"Ok","listText":"Ok","text":"Ok","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9008200401","repostId":1148312978,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"}],"isCommentEnd":false,"newsSizeData":{"likeSize":133,"commentSize":16,"repostSize":0,"favoriteSize":1,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.2","shortVersion":"4.29.2","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/1148312978"}