Share prices and trading volume of AMC Entertainment Holdings surged on Wednesday as retail traders rallied around the stock on social media, marking the latest salvo in a recent campaign pitting them against short sellers.
It started with GameStop. Driven by heated discussion on the Reddit board WallStreetBets and other social media platforms, the video game retailer has seen its share prices skyrocket over the last two weeks, from a closing price of $19.95 on Jan. 12 to a close of $300.16 on Wednesday. Between Monday and Wednesday alone, GameStop’s closing price nearly quadrupled.
Those gains have brought sharp losses for hedge funds and other short sellers who bet against the stock. As GameStop’s stock has risen, some of those short sellers have bought shares to cut their losses, the Wall Street Journal reports, and that demand has driven the price up further.
WallStreetBets traders have since started to target other stocks, including Leawood, Kansas-based AMC, the world’s largest movie theater operator. The company’s shares have seen a surge in activity this week.
At the same time, the company’s share price began to climb. They saw a high volume of trading and closed Monday at $4.42, the first time in more than a month they had closed above $4.
Since the onset of the pandemic, AMC has struggled, temporarily closing theaters, furloughing workers and seeking emergency financing to avoid bankruptcy. Just Monday, the company announced it had secured $917 million in new equity and debt financing to “make it through this dark coronavirus-impacted winter.”
After closing at $4.96 on Tuesday, AMC shares climbed as high as $20.36 on Wednesday before closing at $19.90 — an increase of more than 300%.