The share price of cinema chain AMC Entertainment rocketed higher on Wednesday morning, shooting up 190% about 45 minutes after the opening bell, thanks in large part to investors from a popular Reddit forum piling into the stock, looking to burn hedge funds that have shorted the nation’s largest movie theater company.
After closing at $4.96 per share on Tuesday, AMC shares — following multiple trading halts within the first minutes of the market opening — were up nearly 200% to $14.14 in early-morning trading. That came after AMC opened above $20 per share.
AMC shares have been flying higher since Monday, when the company announced it had raised $917 million to help push off bankruptcy and help the company weather what it called a “dark” winter for theater chains due to the coronavirus pandemic.
The push higher for AMC’s stock has also been spurred on by the company becoming a popular “meme stock” on the Wall Street Bets Reddit forum, where investors are betting on companies like AMC that have been heavily shorted, or bet against, by large hedge funds. (The gaming retailer GameStop, which has seen its share price soar from about $20 per share earlier this month to $300 on Wednesday morning, is the best example of Wall Street Bets throwing its collective might behind a company and sending its share price higher.)
“AMC halted 4 times,” one user posted on Wednesday morning. “This stock is all over the place. IF WE HOLD [our shares] WE WIN.” Others have chimed in on various Wall Street Bets posts that AMC is going to “moon,” or continue shooting higher, as retail investors jump into the stock and try and drive short sellers to close their positions.
AMC’s stock spike increased the company’s market cap to about $5.4 billion on Wednesday morning.