What's Going On With GameStop Stock?

GameStop Corporation GME shares are trading lower Tuesday. The stock appears to be falling alongside AMC AMC.

What To Know: AMC stock dropped a startling 35% last Monday sparked by fears of dilution following a court approval of a settlement that would allow the company to convert its preferred equity units into common shares.

On Tuesday, shares fell another 17% ahead of the 10-to-1 reverse stock split scheduled to take effect Thursday.

Legendary investor Bill Gross, also known as the Bond King, has warned of such a dilution-fueled fall for AMC. In April, Gross cautioned that "the massive dilution of new AMC shares being issued" could result in the stock's downfall.

At the beginning of 2021, during the meme stock craze, AMC was a "fun idea". However, in the absence of easy money, upward momentum is currently unable to be sustained.

GME, another "meme stock", fell over 5% Tuesday, seemingly in conjunction with AMC. Retail weakness, especially in light of disappointing quarterly reports for Macy's and Dick's Sporting Goods, is another possible explanation for GME's fall Tuesday.

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GME Price Action: Shares of GME were down 5.57% at $17.45 at the time of publication, according to Benzinga Pro.

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