Will their rises have more steam?
Stock prices of $Sea Ltd(SE)$ , $PDD Holdings Inc(PDD)$ and $JD.com(JD)$ rallied yesterday on the news over the weekend that the US House passed a bill that would Bytedance to divest of TikTok or the latter would face a ban in the US. TikTok has been increasingly perceived by Sea as a rising competitor with its ambition on e-commerce in Southeast Asia where Sea has held a dominant lead over its peers, until the arrival of TikTok Shop. Temu, which is owned by Pinduoduo, is also facing rising competition from TikTok in the US. Likewise, TikTok has taken a toll on JD's e-commerce business. Hence, a potential ban of TikTok or its divestiture by its parent would be positive for its competitors. However, the bill has still to clear the Senate this week, while TikTok has vowed to pursue legal actions against the bill.Hence, it may be still early days to conclude victory for Sea and Pinduoduo, whose share price may have run ahead on the news and come again under weight should there be any respite for TikTok.
$AMC Entertainment(AMC)$ has also risen on reports that the theatre chain is not renewing a $225 million senior secured revolving-credit facility set to expire Monday, and has paid off any remaining obligations related to the credit facility. While this is welcoming news on its improving cash flow, AMC's woes are far from over. Turnouts at AMC's theatre chain have fallen significantly after the COVID pandemic, as past crowds of movie-goers have since turned to online movie streaming services by the likes of $Netflix(NFLX)$ Bullish has been giving cinemas a run for their money after. Netflix has been able to woo customers away from cinemas with its varied and quality content and the flexibility for viewers to watch movies any time from the comfort of their homes. Hence, I believe that the run-up in AMC's stock price had gone ahead of its fundamentals.
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