Amateur investors sold more AMC Entertainment than they bought on Tuesday, a first since the meme stock craze began earlier this year. Nonetheless, the stock of movie theaters rose about 8% in regular trading.
“Shockingly, retail investors net sold AMC for the first time since February, implying that institutional investors were responsible for the 8% rally,”
The popularity of meme stocks among retail investors is dwindling. According to Vanda Research, during the peak of the meme stock rallies in January and June, retail investors bought more than $1 billion in the group per week. Retail investors purchased less than $250 million of the meme stocks during the most recent rally, which began in August.
“The presence of professional investors in meme stocks has grown. Many hedge funds are now attempting to anticipate changes in retail sentiment and purchase these stocks before retail investors become involved,” Onatibia added.
AMC Entertainment’s stock was down about 2% on Wednesday.
GameStop, another well-known meme stock, reports quarterly earnings after the market closes on Wednesday. The options market is pricing in a 10% swing in either direction following the results of the brick-and-mortar video game retailer.
“With CSCO’s multiple discount to the S&P 500 largely closing to the historical average of 4x from the high single digits a year or so ago, we now view multiple expansion as largely complete, causing us to move to the sidelines,” according to the note.
Year to date, the stock has gained 31%, outperforming the market. According to Morgan Stanley, the company’s fundamentals continue to lag behind those of its peers.
“Part of Cisco’s challenge in recent years has been growth that has occurred primarily outside of the company’s core markets, causing Cisco to undergrow IT spend growth….” Over the last few years, Cisco has improved this positioning; however, at one-third of the company’s revenue, hyperscale and software have a long way to go before they are more meaningful earnings drivers,” according to the note.
On Wednesday, Cisco will hold an analyst day. According to Morgan Stanley, one of the things that could change investor sentiment following the event is a management discussion about a potential software acquisition.
Despite the downgrade, Morgan Stanley increased Cisco’s price target by $2 to $59 per share. The new price target is less than 50 cents higher than the stock’s closing price on Wednesday.
On Tuesday night, Armstrong claimed on Twitter that the Securities and Exchange Commission had been “sketchy” in its warning Coinbase not to launch its new product. On Wednesday’s “Squawk on the Street,” Cramer said the CEO’s tweets were “shameful” and that he should retract them.
“I believe this demonstrates an unjustified contempt for regulators. “These are people in government who are serving and doing a very good job, and trashing them publicly on Twitter and on the air is not only ill advised, but it also says, ‘Listen, we want war,’” Cramer said. “You can’t have a war with the regulators. They will always have the final say.”
Lending and staking products have proliferated in the cryptocurrency world in recent years, allowing users to potentially earn yield or rewards from their holdings. However, Armstrong stated that the SEC deemed Coinbase’s proposed lending product to be a security, warned the company that it could face legal action if it launched the service, and then refused to meet with Coinbase’s leadership.
Cramer called the decision to publicly criticize the SEC “one of the stupidest things I’ve ever seen,” comparing it unfavorably to Tesla CEO Elon Musk’s confrontations with the regulator.
“I’m not sure who Armstrong’s lawyers are, but this is stupider than what Musk did,” Cramer said.
Washington politicians and regulators have been debating how to regulate cryptocurrencies and which agencies should be in charge. New SEC Chair Gary Gensler, who previously taught a crypto and blockchain class at the Massachusetts Institute of Technology, has called for increased investor protections and for Congress to give the SEC more authority over digital assets.
Armstrong cited similar lending products from other crypto companies as evidence that the SEC was being unreasonable in a series of tweets.
“The SEC’s stated goal is to protect investors and create fair markets. So, who are they guarding here, and what is the danger? “People appear to be quite pleased to be earning yield on these various products across a wide range of other crypto companies,” Armstrong said.
Coinbase shares were down more than 3% in early trading on Wednesday, after going public in a blockbuster direct listing in April. The stock reached an all-time high of $429.54 on its first day of trading before closing about $100 lower. The fortunes of Coinbase shares have fluctuated in tandem with the volatile price of bitcoin. The stock was trading slightly higher than its initial reference price of $250.