Shares of retail favorites AMC Entertainment (NYSE:AMC) and BlackBerry (NYSE:BB) Ltd fell on Friday as a social media-driven rally in the so-called "meme stocks" appeared to fizzle out at the end of a second straight week of stunning gains.
Cinema operator AMC was down about 9.7% in early deals after falling 18% on Thursday as it completed its second share offering in three days, taking advantage of a nearly 400% surge in its share price since mid-May.
The company has been at the center of a second wave of buying by small-time investors who have hyped the stock in forums such as Reddit's WallStreetBets, reinvigorating the "meme stock" phenomenon that sent shares of video game retailer GameStop (NYSE:GME) up 1,600% in January.
Message volume on Friday related to AMC jumped 12% on trading-focused social media site Stocktwits and 94.5% of the messages reflected a positive sentiment.
But with retail investors now accounting for more than 80% of AMC's shareholder base, many institutional shareholders have said they were steering clear of the stock, while analysts have warned the shares were heavily over-valued.
As of Thursday's close, AMC boasted a market capitalization of $25.76 billion, making it more valuable than 40% of the companies in the S&P 500. At its premarket price of about $45, the stock is trading at 12 times analysts' median price target.
Jefferies (NYSE:JEF) told its clients on Wednesday that its prime brokerage arm would no longer allow the execution of short sales in GameStop, AMC and MicroVision Inc, according to reports in Street Insider and Bloomberg News.
Meanwhile, U.S.-listed shares of BlackBerry fell 4.9% after six straight sessions of gains. The stock is up 140% year-to-date, which would be its biggest annual increase since 2007 if it holds.
Shares of other "meme stocks" GameStop and Koss Corp were down 2.1% and 4.6%, respectively.