Street performers in Minnie Mouse costumes pass by an AMC movie theater in the Times Square area of New York at night on October 15, 2020.
Amir Hamja | Bloomberg | Getty Images
Shares of troubled movie theater AMC Entertainment more than tripled on Wednesday during trading in front of the market amid a spate of trading activity in some of Wall Street’s shortest stocks.
Shares of AMC jumped 230% ahead of Wednesday’s opening clock, while GameStop rose 67%.
Individual investors create short pressures by packing these names, while hedge funds that are short on the other side want to cover their losses. They promote their activities on the Wallstreetbets board of Reddit, which has 2.8 million members. AMC appears to be a growing topic of interest to the board.
The influence of retail investors – the clearest in GameStop – has captivated the streets over the past few days, talking to a new class of traders who grew up in the midst of the pandemic.
“The spotlight has shifted from Large Cap Tech / ‘Retail Favorites’ to a largely ignored angle of heavy shortfall of smaller stocks,” Barclays said in a note to customers on Tuesday. retail significantly influenced the price action and sentiment in these strongly abbreviated names, which confirmed the dominance of investors in retail options. “
AMC currently has 24% of its short-term interest rate. Meanwhile, GameStop’s short stake is 138%, according to FactSet.
AMC rose 26% on Monday and 12% on Tuesday, bringing its week-to-date profit to more than 40% after just two days. The company announced Monday that it has secured enough funding to remain deep in 2021.
“This means that any talk of a looming bankruptcy for AMC is completely off the table,” said CEO Adam Aron.
For the month, AMC shares rose more than 130%. However, given the downward decline in the stock over the past year, a smaller profit is obviously a much larger percentage movement.