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Today, shares of touted meme stock favorite AMC Entertainment (NYSE:AMC) are currently down another 13% at the time of writing. I say “another” because the past few days haven’t been friendly to investors in AMC stock. This is a stock that’s currently down around 30% over the past five trading sessions.

amc

Source: QualityHD / Shutterstock.com

Given the amount of momentum we’ve seen with AMC in the past, this move is rather shocking. Most of the volatility has been to the upside with this stock in recent months. However, today it appears concerns that momentum may be dissipating with this retail investor favorite are beginning to bubble to the surface.

Let’s dive into the key drivers of these recent moves.

Retail Momentum Slowing for AMC Stock

As many investors know, the orchestrated attempt by millions of retail investors to squeeze short-sellers in various prominent stocks has become the talk of Wall Street. It’s a David vs. Goliath battle. And for much of the past few months, David has been winning.

Stocks like AMC with relatively high short volume ratios have been targeted as short-squeeze candidates by retail investors. By buying up more of the float, retail investors are hoping to increase hard-to-borrow costs while also forcing short-sellers to cover at higher prices. Such a scenario has resulted in previous spikes in AMC stock that have been notable. This stock opened the year around $2 per share. Since the beginning of the year, investors still have booked a 1,500% return on this stock.

That said, AMC has more than halved from its recent peak of more than $72 per share. It appears hedge funds and big money investors are being vindicated in their view that this stock is completely detached from its fundamentals. Accordingly, retail investors appear to be backing off the gas, at least for now.

Whether momentum picks up again or continues to slow will be key for how AMC stock performs from here.

Bottom Line

AMC’s business has certainly boomed upon the lifting of various pandemic-related restrictions. However, some believe the movie theater business is likely to be in turmoil for some time. Streaming appears to be the future growth investors are looking to. And Wall Street simply doesn’t appear to believe the narrative that movie theaters will be back, better than ever.

Sure, AMC stock remains an attractive proposition for speculators today. However, it seems many speculators are joining in on the downside momentum. Accordingly, it’s hard to see where the bottom or the top could be for this stock right now.

On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

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