AMC shares almost double within the meme inventory frenzy
AMC multiplex cinema.
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A frenzy of buying AMC Entertainment stocks resulted in multiple trading stops on Wednesday, with meme stock traders triggering a surge of more than 100%.
Trading was briefly interrupted several times as the shares quickly changed hands. More than 710 million shares were exchanged during trading, almost double the outstanding shares of AMC. The company’s average 30-day volume is 143 million shares.
AMC closed at an all-time high of $ 62.55 per share, almost double Tuesday’s closing price. The previous closing record was $ 35.86, which was set on March 23, 2015, according to FactSet data.
At one point, AMC stock rose as high as $ 72.62, well above its previous intraday high of $ 36.72 that occurred on Friday.
The manic activity comes despite a report that a hedge fund has sold its stake in the cinema company. On Tuesday, AMC reported that it had sold 8.5 million newly issued shares to Mudrick Capital, the latest in a series of capital increases for the stock, a favorite with Reddit traders. The hedge fund later turned around and sold all of its AMC shares for a profit, according to Bloomberg News.
AMC announced in a securities filing that it raised $ 230.5 million through a stock sale to the investment firm. The cinema operator said it would use the funds for potential acquisitions, modernize its cinemas, and reduce its balance sheet.
AMC’s business was effectively shut down during the pandemic as cinemas were closed for months in most of the country. With no money coming in from ticket sales and concessions, AMC fell behind with its rent. On the verge of bankruptcy, short sellers raved about the stock.
Retail investors inspired by Reddit chats have used their growing numbers to fight back. According to data from S3 Partners, investors who sold the stock short lost an estimated $ 1.23 billion over the past week as the stock rose more than 116%. The stock is up more than 2,800% since the start of the year.
The company has made special efforts to communicate with this new investor base. On Wednesday it announced that it had launched a new portal for its retail investors on its website. The website has special offers, including a tub of free popcorn and exclusive movie screenings.