It was a tale of two Reddits on Wall Street this week: Meme-stock investors drove shares of AMC Entertainment Holdings (NYSE:AMC) ever higher -- up 22.9%. But they drove shares of Express (NYSE:EXPR) and Alcoa (NYSE:AA) into the basement, down 12.1% and 10.2%, respectively, through Thursday's close.
And that may be the real headline of the week. All of a sudden, it seems Alcoa is now a meme stock.
Don't just take it from me -- Bank of America itself made the declaration yesterday. It said Alcoa stock was briefly a favorite of momentum investors, but Alcoa "fell off the top-mentioned list this week," and this may be depressing enthusiasm for the shares.
More substantively, Reuters reported Thursday that China's National Food and Strategic Reserves Administration is preparing to "release metal in batches in near future," selling some of its aluminum and other reserves at below-market prices in an effort to lower production costs and salvage the profit margins of its producers. This promises to pressure aluminum prices at Alcoa -- and is yet another reason for investors to be avoiding the stock.
In contrast, AMC has been the beneficiary of good news -- both on Reddit and off. On Reddit, according to StreetInsider.com, Bank of America says that the movie-theater chain "remains the No. 1 most-discussed stock," boosting its popularity.
And off Reddit, AMC stock benefited from a credit rating upgrade late last week; this was followed Thursday by the beginning of voting on the company's anticipated sale of 25 million shares, which could raise as much as $1.5 billion in new cash to help offset the debt load that AMC accumulated during the pandemic.
Now, that still leaves the declining stock price of Express to address, and...I'm afraid there's not a whole lot I can tell you about that one. Bank of America was mum on why Express is falling, and there doesn't appear to be a whole lot of substantive news out on the wires this week. At the same time, there does seem to be a lot of frustration among traders venting on Stocktwits.com over the stock's failure to "move" higher in a timely fashion.
The stock's high short interest -- more than 9.5% of the float -- would seem to make Express a good candidate for a short squeeze. But the impatient nature of many momentum traders may simply cause Express to fall out of favor as traders seek easier prey.