AMC trading frenzy doubles stock price, as movie chain further embraces its retail investors

FAN Editor

AMC multiplex movie theater.

NicolasMcComber | Getty Images

Meme-stock traders rallied on Wednesday, sending shares of AMC Entertainment up 95%.

The stock closed at an all-time high of $62.55 per share, nearly double Tuesday’s closing price. Its previous closing record had been $35.86, which was set on March 23, 2015, according to FactSet data.

At one point, AMC’s stock spiked as high as $72.62, far above its previous intraday high of $36.72, which occurred on Friday.

Trading was halted several times during the day as shares soared more than 100% to reach these new heights. At the end of the day more than 710 million shares were exchanged during trading, nearly double the number of AMC’s shares outstanding. The company’s 30-day average volume is 143 million shares.

The manic activity comes despite a report that a hedge fund had sold its stake in the movie theater company. On Tuesday, AMC reported it had sold 8.5 million newly issued shares to Mudrick Capital, the latest in a series of capital raises for the stock, a favorite of Reddit traders. The hedge fund later turned around and sold all of its AMC stock for a profit, according to Bloomberg News.

AMC said in a securities filing that it raised $230.5 million through a stock sale to the investment firm. The movie theater operator said it would use the funds for potential acquisitions, upgrading its theaters and deleveraging its balance sheet.

AMC’s business was effectively halted during the pandemic, as cinemas were shuttered in most of the country for months. With no money coming in from ticket sales and concessions, AMC fell behind on its rent. On the brink of bankruptcy, short sellers swarmed the stock.

Retail investors inspired by Reddit chats have used their growing numbers to fight back. Last week, investors shorting the stock were estimated to have lost $1.23 billion as the shares rallied more than 116%, according to data from S3 Partners. The stock is up more than 2,800% year to date.

The company has been making special efforts to communicate with this new investor base. On Wednesday, it said it launched a new portal on its website for its retail investors. The site includes special offers, including a tub of free popcorn and exclusive movie screenings.

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