Advertisement
Advertisement

Amc Courts Reddit Crowd Again After Hedge Fund Share Deal

By:
Reuters
Updated: Jun 2, 2021, 14:30 UTC

(Reuters) -Shares of Reddit trader favourite AMC Entertainment surged another 21% on Wednesday and were headed for a record high as the pack of individual investors behind recent gains were unfazed by a hedge fund flipping its stake in the cinema operator.

Times Square characters who pose for photos for

In this article:

By Aaron Saldanha and Devik Jain

Mudrick Capital Management bought 8.5 million new AMC shares for $230 million on Tuesday before later selling them at a profit, according to a source, a bold move by the fund and the company to cash in on the retail-driven surge in its stock.

Other institutional traders continued to pour scorn on rises in so-called “meme stocks”, which also include GameStop Corp and BlackBerry Ltd, but shares in all three continued to gain in trading before the bell.

“It’s not rational, but do not bet against it,” said a Berlin-based trader.

AMC has been among the biggest gainers from a vigorous market battle since January involving both hedge funds and a new generation of social media centric small-time traders.

On Wednesday, the company launched a new scheme that offered even the smallest investor a free large popcorn if they signed up to a regular newsletter.

“Even if our shareholders now number in the millions … these people are the owners of AMC, and I work for them,” Chief Executive Officer Adam Aron said.

AMC’s stock has surged more than 1,400% this year and, at nearly $40, is trading at more than 10 times the median analyst price target.

The number of messages related to AMC on trading-focused social media site Stocktwits rose more than 7% on Wednesday, with most of them reflecting a positive sentiment.

Daily trading volumes in AMC have reached their highest since January in the past week, according to Refinitiv Eikon, while data from Fidelity showed it was the platform’s most traded share.

GameStop was up 1% in premarket trading, while Koss Corp jumped 7%. BlackBerry’s U.S.-listed shares were last up 17%, bringing their total yearly gains to more than 75%.

(Reporting by Sagarika Jaisinghani, Aaron Saldanha and Devik Jain in Bengaluru and Thyagaraju Adinarayan in London; Editing by Sriraj Kalluvila, Shounak Dasgupta and Patrick Graham)

About the Author

Reuterscontributor

Reuters, the news and media division of Thomson Reuters, is the world’s largest international multimedia news provider reaching more than one billion people every day. Reuters provides trusted business, financial, national, and international news to professionals via Thomson Reuters desktops, the world's media organizations, and directly to consumers at Reuters.com and via Reuters TV. Learn more about Thomson Reuters products:

Did you find this article useful?

Advertisement