Shares for AMC surged 300 percent Wednesday, offering new hope for the struggling cinema chain that has been fighting off bankruptcy for months.
The jump was powered not by a flood of movie-goers but by a group of small traders cheered on by posters on a Reddit message board named WallStreetBets. That triggered a trading frenzy akin to the one that has sent GameStop shares skyrocketing.
“AMC is clearly next,” one poster wrote on the board Wednesday, according to the Wall Street Journal. “Double down AMC wooo,” penned another.
AMC has been in strife for some time. With cinemas closed for the pandemic, it has been burning through about $100 million per month, the Journal said.
CEO Adam Aron said Monday that new debt and equity financing meant imminent bankruptcy was off the table. The news helped the stock price rise 26 percent to $4.42.
By Wednesday, with trading mania in force, the stock closed at $19.90.
“I expect they’ll do another capital raise if it keeps going up,” analyst Michael Pachter of Wedbush Securities told the Journal. “And if they can get the WallStreetBets crowd to plow their profits from GameStop, they’ll be in a great position.” [WSJ] — Sylvia Varnham O’Regan