Why AMC Stock Is Plunging (Again) This Week, and Cineworld and Cinemark Are Following Suit
It's been another rough week for movie theater stocks. Despite rebounds on Thursday and/or Friday, names like AMC Entertainment Holdings (NYSE: AMC) and Cinemark Holdings (NYSE: CNK) are poised to end Friday's session nearly 20% below last Friday's closes. Cineworld Group (OTC: CNNW.F) is leading the way with a weekly loss in excess of 20% as of midday Friday. Shares of Imax (NYSE: IMAX) are faring the best, by virtue of a more-modest loss of around 13%. The setbacks mark the fourth straight week of selling pressure on these once-skyrocketing stocks.
Don't look for a specific reason AMC and its peers took a tumble this week; you won't find one. Rather, you'll feel one. These plunges are the result of a reversal of the meme-stock mania that drove them all to shocking highs in June. Speculative investors -- finally offered a chance to look around and assess the ascension -- seem to be realizing all of these stocks will struggle to justify their still-lofty valuations.
The rise and fall of AMC shares (and other theater chain stocks that latched onto the volatility) was inevitable, as the rally's roots were untenable.
Source Fool.com