What happened
Shares of GameStop (GME 1.07%) are tumbling 5% heading into midday trading Monday as the meme stock rally of last month gives way to a rout in late August.
Not only is the video game retailer's stock down, but Bed Bath & Beyond (BBBY) continues to collapse after activist investor Ryan Cohen sold all of his holdings in the home goods retailer, and AMC Entertainment (AMC 8.22%) is plummeting nearly 40%, but that's because the movie theater owner's new preferred shares began trading today.
Going under the ticker symbol APE, after the nickname AMC investors have given themselves, but also standing for AMC Preferred Equity, those shares were up 8.6% at 11:57 a.m. ET.
So what
Meme stocks aren't the only stocks falling Monday as the Dow Jones Industrial Average is down 444 points, or about 1.3%, while the S&P 500 is down 1.5%. Concerns about the economy are still making the market shaky, and there is fear the Federal Reserve will continue its aggressive policy for raising interest rates.
That makes high-risk stocks like GameStop, Bed Bath & Beyond, and AMC Entertainment even riskier and more volatile than they otherwise would be. With Cohen selling his Bed Bath & Beyond stake and AMC investors still worried about the potential for dilution after the APE transaction settles in, other issues are getting weaker, too.
Now what
GameStop investors have their own concerns over how Cohen, who serves as the video game retailer's chairman, is going to get his company turned around. So far it's been betting on a new non-fungible token side business as a partial solution, but the cryptocurrency collapse hasn't helped get that off to a rousing start.
