Top line

After a nearly weekly delay, AMC Entertainment shares fell on Thursday morning on a number of other recently recovering meme stocks after the company warned investors that its shares were overvalued and echoed experts who have warned of an impending correction.

Key information

AMC shares had cratered on Thursday at 11:30 a.m. from EDT, wiping out about $ 9 billion in market value just one day after the share’s rise of 96%.

At least twice on Thursday morning, price volatility became so strong that the New York Stock Exchange halted trading in AMC shares. use to prevent volatile, emotional market fluctuations.

After the fall in AMC, shares of Bed, Bath & Beyond, which rose 62% on Wednesday, fell as much as 26%, and GameStop, the best-performing meme stock during late January trading, fell nearly 13%.

Even BlackBerry shares, which rose nearly 15% at one point on Thursday, fell 6% by late morning.

Despite the harvest of collapsing stocks, there were anomalies: Sundial Growers, a cannabis stock favored by Reddit merchants (and a short press target February), remained on Wednesday and rose another 15% on Thursday.

Central background

Ever since the AMC began its meteoric recovery late last month, experts have warned repair would be inevitable, but almost impossible. In late January, when the meme stocks last crashed, it took about two weeks for the AMC to bottom out at about 28 percent of its peak on January 27th. Recent weeks, however, have shown that the wild price fluctuations caused by the highlighted social media climate are more than just craze, says Nigel Green, CEO of $ 12 billion in asset advisory DeVere Group. “Such speculative groceries are becoming a global phenomenon,” he said in an email. Even the AMC warned of the volatility of the regulatory application on Thursday, saying: “In this situation, we warn you not to invest [our stock]unless you are willing to lose the risk of losing all or a significant portion of your investment. “

Surprising fact

Despite Thursday’s crash, AMC shares are still more than 2,000% this year. That’s almost 20 times more than the S&P 500’s Marathon Oil’s best-performing fleet. Other meme stocks have similarly withheld their Reddit fuel gains as GameStop has grown 1,400 & and BlackBerry 120%.

What to watch

At a congressional hearing last month, Gary Gensler, recently appointed director of the Securities and Exchange Commission, said the agency will release a report this summer outlining the issues raised by the recent trading disruption. He suggested regulators would reject new rules aimed at online brokers such as Robinhood and eToro, which he said have “played” the investment “to get people to trade more”.

Further reading

Not just AMC: These are meme stocks that are being pumped again by Reddit merchants because experts demand extreme caution (Forbes)

AMC sells up to 11.6 million shares after rising 2900%, but warns that investors could lose everything (Forbes)

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