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Virgin Galactic, AMC Fall as Meme Stock Sheen Fades

Former meme stock favorites Virgin Galactic and AMC Entertainment see their shares falling.

Virgin Galactic  (SPCE) - Get Report and AMC Entertainment  (AMC) - Get Report were both losing ground Tuesday as retail traders apparently moved on from the former meme stock favorites.

Shares of Virgin Galactic declined 7.2% to $37.76 at closing, while AMC tumbled 7.7% to $39.35.

Both companies had been boosted by retailer traders on WallStreetBets, but both have seen their shares sink as other companies move into the meme stock spotlight. 

Virgin Galactic had been flying high--literally, after founder Richard Branson and a five-person flight crew Sunday completed a test flight on its VSS Unity space plane with plans to launch space tourism trips next year.

However, shares fell on Monday after the aerospace company said in a filing that it may sell up to $500 million worth of stock.

"I don't know how anyone thinks rocket coaster rides for celebrities is a good business to invest in." one Reddit poster said Monday. "This is a vanity project for Richard."

"Lol, everyone said it was going to the moon the other day and now it dropped near 20%," another said.

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Canaccord analyst Ken Herbert raised his price target on Virgin Galactic to $48 from $35 while keeping a buy rating on the shares after the flight, according to the Fly.

Though he sees limited near-term positive news flow ahead of the anticipated launch of commercial operations in early 2022, Herbert believes the selloff on the company's $500 million share offering and "buy the rumor, sell the news" sentiment coming out of the weekend has been overdone and argues that the pullback represents a buying opportunity.

Tuesday is AMC Day, where investors are encouraged to buy and hold AMC stock in the hope of sending the stock higher.

TheStreet's Jim Cramer got in on the act, tweeting "AMC buyers HOLD!"

AMC did have some good news to report. For the second time in three weekends, and third time since Memorial Day weekend, AMC recorded its busiest weekend attendance numbers in the last 16 months. 

The industry box office was led by "Black Widow," which opened to an estimated $80 million for its opening weekend in the United States and Canada, breaking the previous record, which was set by "F9" just two weekends ago.

However, AMC and other movie chains, such as Cinemark  (CNK) - Get Report and National CineMedia  (NCMI) - Get Report fell as many viewers saw the film on the Disney+ streaming channel, including Cramer.

"I love the convenience of watching," he said. "Remember, everything's overpriced at the movie theater. That's where they make their money."