Recently, Reddit meme traders followed Chewy CEO Ryan Cohen on the Bed Bath & Beyond (BBBY)
trade. Their easy gains from a sub $5 BBBY stock price to around $30 evaporated. Within a day of the
intraday peak, Cohen’s RC Ventures fund disclosed it sold the entire BBBY stock stake.
The meme slump for BBBY sets up a chain reaction. AMC Entertainment (AMC) and GameStop (GME)
are nearly two years old in the meme trading world. The lost momentum instigated by Cohen will
devastate AMC stock.
CEO Adam Aron smartly characterized the APE share distribution for AMC as a tribute to Ape
shareholders. APE stock is just a dilution of AMC stock. Fundamentals are weakening considerably for
the theatre chain. Last week, Cineworld’s expected bankruptcy filing will undermine the AMC trade. It
will remind speculators in the entertainment sector that AMC does not have any business momentum to
grow cash flow.
AMC will return to old habits that do not make money. For example, it will re-introduce a Stubs A-list
membership to squeeze steady cash flow from subscriptions. Streaming services firms will not sit still.
They will offer discounts on content. In addition, they will save their best content for online
consumption only.
The AMC meme trade is almost over. Avoid the stock before the share price falls further.
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