- NYSE:AMC adds 12.22% and then surges after hours amidst another flat day for the broader markets.
- AMC CEO claims the company has been saved from bankruptcy after the recent surge in price.
- AMC is the most recent company to be given the short seller’s revenge by a rogue group of Reddit investors.
https://www.fxstreet.com/news/gamestop-gme-tumbles-over-25-as-robinhood-puts-shares-on-reduce-only-mode-202101281424: AMC Entertainment Holdings Inc (NYSE: AMC) has been tumbling down, trading at around $7.50 at the time of writing, a crash of some 62.25%. The move comes one day after it surged by 300% – a result of raising over $300 million. However, the main reason for the drop may be related to trading issues. Robinhood moved AMC to “reduce only” mode, allow investors only to take out positions, not enter new ones. It did the same for GameStop Inc (NYSE: GME) and a slew of other stocks. Interactive Brokers made a similar move. See Gamestop (GME) tumbles as Robinhood puts shares on “reduce only” mode, buyers fight back
Update: AMC Entertainment Holdings Inc (NYSE: AMC) has closed Wednesday’s trading with a whopping surge of 301.21% to $19.90, giving the theaters’ firm a valuation of nearly $7 billion. AMC completed a secondary public offering worth a total of $304.8 million, with a price of over $4.81 per share. TD Ameritrade restricted trading on NYSE: AMC amid the frenzy, putting shares in the same list as Gamestop (GME) which also skyrocketed. Bulls organizing on Reddit’s wallstreetbets have been defeating hedge funds that went short on these stocks. The frantic action around AMC and GME has raised alarm bells – signs of a late-stage rally which implies a broader downfall in stocks. Regulators and even the White House are monitoring developments. However, Federal Reserve Chair Jerome Powell seemed unmoved by action in stocks, focusing instead on the long road to recovery. Will NYSE: AMC continues higher on Thursday? Premarket trading suggests a fall may be on the cards. More: Gamestop (GME) Stock Price and Forecast: Are shares going to break $500 today?
NYSE:AMC has spent much of the COVID-19 pandemic teetering on the brink of bankruptcy as the largest movie theater chain in the world has been saved by an unexpected group of investors. On Tuesday, shares of AMC skyrocketed once again adding 12.22% to close the trading session at $4.96. AMC continued its ascent in after-hours trading as the stock surged an additional 35%, soaring towards its 52-week high of $7.78. Despite its recent resurrection, AMC is still down 34.90% over the past 52-weeks, but at least investors are slowly making some of those losses back.
The unexpected group of investors are a part of the Reddit forum r/WallStreetBets which provides investing tips, strategies, and play by play trades. This is not the first time the group has been in the spotlight as several members posted about a leverage glitch within the popular Robinhood trading platform. The group also led the charge on short squeezing noted short-seller Citron Research by coordinating a controlled squeeze to the GameStop (NYSE:GME) stock. AMC was a part of a move to “save AMC” as members succeeded in saving the cinema brand from bankruptcy. It is an interesting lesson in the power of social media and how easily manipulated the stock market can be.
AMC stock forecast
The ‘save AMC’ movement has actually worked as CEO Adam Aron announced that bankruptcy is no longer on the table, which is further fueling the stock price. AMC still has an upward battle ahead as people have still been hesitant to attend at cinemas even having reopened in some parts of the world.
Credit: FX Street