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AMC Entertainment shares soared 70% after-hours Friday after a judge rejected a proposed court settlement that would have cleared the way for the movie-theater giant to complete a set of equity transactions enabling it to issue substantially more shares.
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Mullen Automotive Inc. is attracting more meme-like attention from retail investors than traditional meme stock darlings AMC Entertainment Holdings Inc. and GameStop Corp., according to an influential meme-stock trader.
The electric vehicle company’s stock has become the “meme go to” for retail investors, said the trader, who goes by the name Obi. The trader participates in the WallStreetBets group on Reddit under the user name Major-Access2321.
Obi, whose Making Easy Money YouTube channel has over 28,000 subscribers, said that Mullen
MULN,
is generating plenty of buzz across social media. “When it comes to meme stock world on Reddit, Twitter and now even Facebook, groups are popping up calling themselves the ‘MULN army’,” he told MarketWatch.
The trader said that “less and less” people are speaking about AMC Entertainment
AMC,
and GameStop
GME,
“More and more people are speaking about MULN … they call it the meme that makes sense,” he added.
Mullen shares have seen a dramatic spike in trading volume recently, with average trading volume of 1.1 billion shares Wednesday and 547.8 million shares over the past five days, according to FactSet data. The stock’s 65-day average trading volume is 279 million shares. Mullen ended Wednesday’s session down 21.1% on the company’s announcement of a reverse stock split.
Related: Mullen Automotive shares plunge on reverse stock split announcement
AMC’s stock ended Wednesday’s session up 4.4% on trading volume of 25.1 million shares, below its 65-day average trading volume of 35.4 million shares. GameStop’s stock closed up 1.7% Wednesday on trading volume of 3.2 million shares, below its 65-day average of 4.8 million shares.
The stock was down 18% on Thursday.
The over outlook for the EV market looks bright, according to Obi. “Retail feel like they have something special here with MULN,” he added.
On Wednesday Mullen Automotive Inc. announced that it will conduct the 1-for-25 reverse stock split as the electric-vehicle company looks to maintain its Nasdaq listing.
The stock will continue to trade on the Nasdaq Capital Market under the existing symbol “MULN” and will begin trading on a split-adjusted basis at market open Thursday.
In March, Mullen announced that the Nasdaq had approved the company’s request for a 180-day extension to meet the $1 minimum-bid-price requirement. On Sept. 7, 2022, the Nasdaq notified the company that its stock was not compliant with rules as it had traded below $1 for more than 30 days.
Related: After TOP Financial’s surge, influential meme-stock trader looks for next big opportunity
Mullen’s stock soared last year after Amazon.com Inc.’s
AMZN,
delivery partner placed an order for up to 600 cargo vans, and the company has since teamed up with Rapid Response Defense Systems to supply vans for federal government business.
In December, Mullen announced that it is partnering with Loop Global Inc. to build public and private EV-charging technology, infrastructure and network solutions. Earlier this year, Mullen joined forces with Qiantu Motors to launch what they called an EV supercar.
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Bed Bath & Beyond Inc.’s stock jumped 34.4% in morning trading Wednesday, as shares of the troubled home-goods retailer extended their meme-like bounce to a third straight session.
Shares of the embattled company and sometime meme stock ended Tuesday’s session up 22.5%, which followed a 17.6% surge on Monday. The rally was fueled by social-media speculation, according to retail trading platform Capital.com, which said that the bounce was not likely to last.
A three-day win streak would be the longest such streak since the four-day stretch that ended Jan. 12, 2023.
The rally came after Bed Bath & Beyond’s
BBBY,
stock closed at a record low of 24 cents on Friday following a 22.6% plunge in three days after the company disclosed a sale of more than 100 million shares. The retailer, which is attempting to stave off bankruptcy, said it could sell up to $300 million worth of stock.
Related: Bed Bath & Beyond stock’s meme-like bounce won’t last, analyst says
The company’s stock has fallen 81.6% in 2023, compared with the S&P 500’s
SPX,
gain of 8%.
It has been a tumultuous few months for the retailer, which announced another equity offering earlier this year. That came after a troubled couple of years marked by strategic missteps, cash burn, challenging underlying business trends and the impact of the COVID-19 pandemic. Earlier this month, the company issued a sales warning that sent the stock to a then-record low.
Bed Bath & Beyond is also pushing for a reverse stock split. In a recent filing, the company said a special meeting of shareholders would be held May 9 to vote on the proposal. The vote is on whether to effect a reverse stock split “at a ratio in the range of 1-for-10 to 1-for-20, with such ratio to be determined at the discretion of the Board,” according to the filing.
Stocktwits, a social platform for investors and traders, has been seeing plenty of activity related to Bed Bath & Beyond. “Sentiment and message volume on the platform saw an uptick yesterday and today compared to last week,” Tom Bruni, lead writer of the Daily Rip & Markets, Stocktwits’ newsletter, told MarketWatch.
Related: Bed Bath & Beyond’s stock hit record lows amid push for reverse stock split
“It’s important to point out that many retail investors’ positions with meme stocks are so underwater that the narrative is more so self-deprecating than enthusiastic, with tons of comments like ‘only needs to move up 5000% more, and I would break even!’,” he added.
Bruni also noted that companies that file for bankruptcy often end up rallying afterward, citing the recent example of National CineMedia Inc.
NCMI,
whose stock popped last week after filing for Chapter 11 bankruptcy protection.
“A potential reason for this is investors may think that a reorganization may be the company’s best shot at surviving,” he told MarketWatch. “Investors may be betting that Bed Bath & Beyond might eventually have to take this route. However, we won’t know until next month’s reverse stock split vote takes place.”
Additionally, bankruptcy often sparks a short covering rally, according to Bruni, who notes that bearish investors don’t want to risk their profits in an attempt to squeeze the last bit of juice out of the stock. “When a company files for bankruptcy, it’s generally a sign your bearish thesis was correct, and you can take some chips off the table,” he added. “Very few investors will ride a stock to zero, as the risk isn’t worth it in many cases.”
Related: Bed Bath & Beyond has launched a ‘Hail Mary pass’ with latest partnership, says retail expert
“Also, at that point, there are few incentives for people down a lot on their investment to sell for a loss,” Bruni said. “They’d rather hold and see what happens.” Between “bag holders” and shorts covering, there’s more demand than supply for the stock, so prices go up, according to Bruni. “Then, that can feed on itself if that lasts for more than a few hours/days,” he added.
Earlier this month, Bed Bath & Beyond announced a new vendor consignment program with ReStore Capital in an attempt to boost its inventory. Carol Spieckerman, president of retail advisory firm Spieckerman Retail, told MarketWatch that the consignment plan feels like “a Hail Mary pass.”
Spieckerman said Bed Bath & Beyond is continuing “a mighty fight” amid mounting distractions, such as former chief executive Mark Tritton’s recent compensation lawsuit against the company. The lawsuit alleges that in January, Bed Bath & Beyond ceased making payments owed under Tritton’s separation agreement. Under the terms of the agreement, Bed Bath & Beyond was required to pay Tritton $6,765,000 in ratable installments over a 24-month period beginning in July 2022, according to the lawsuit. The payments were made from July 2022 to January 2023, it said.
Bed Bath & Beyond told MarketWatch that the company does not comment on legal matters.
Of eight analysts surveyed by FactSet who cover Bed Bath & Beyond, two have the equivalent of hold ratings and six have the equivalent of sell ratings.
Additional reporting by Tomi Kilgore.
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Shareholders of AMC Entertainment Holdings Inc. voted overwhelmingly in support of the company’s proposal to convert AMC Preferred Equity units into shares of common stock Tuesday.
AMC’s AMC stock, which was repeatedly halted for volatility Monday, fell 13.8%. APEs APE rose 9.3%.
In January, AMC announced the special meeting of shareholders…
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Robinhood Markets Inc. accidentally sold short on a small stock as it went on a meme-like ride in December, costing the trading app more than the stock’s current market capitalization, executives disclosed Wednesday.
Cosmos Health Inc.
COSM,
shares nearly tripled and experienced record trading volume more than seven times any previous day on Dec. 16, as online traders looking for heavily shorted companies accused exchanges of not allowing them to sell their shares into the updraft. Robinhood
HOOD,
executives admitted Wednesday that their trading app actually became part of the frenzy, and ended up down $57 million because of it.
In an earnings call, Robinhood Chief Executive Vlad Tenev noted a “processing error on a corporate action” that was “really disappointing,” leaving Chief Financial Officer Jason Warnick to spell it out.
“A processing error caused us to sell shares short into the market, and although it was detected quickly, it resulted in a loss of $57 million as we bought back these shares against a rising stock price,” Warnick said.
When Cosmos Health effected a 1-for-25 reverse stock split that Friday morning in December, just hours after announcing its intentions, trading portals did not appear prepared. As MarketWatch reported on the day, TD Ameritrade publicly told Twitter users that the company had not received the newly issued shares to dole out to their clients as the stock spiked. A Charles Schwab Corp.
SCHW,
spokesperson emailed MarketWatch the next week to say that the distributions were all taken care of as of the end of the next business day, a Monday.
The stock gains didn’t last through that Monday, though — after reaching as high as $23.84 on the day that Robinhood was apparently buying, they lost it all in after-hours trading and headed even lower after Cosmos Health announced an equity offering.
Shares closed Wednesday at $5.04, which gives Cosmos Health a market cap of about $53 million, according to FactSet — less than Robinhood executives said they lost on the Dec. 16 trades.
Robinhood shares were up in after-hours trading Wednesday after the trading app reported a fourth-quarter miss, but said the company would seek to buy back shares sold to disgraced cryptocurrency-exchange founder Sam Bankman-Fried and executives would forego $500 million in stock compensation. Robinhood stock has declined 21.8% in the past 12 months, as the S&P 500 index
SPX,
has dropped 8.9%.
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