Meme Traders Trigger Five-Day AMC Rally

AMC rallied for five days on Nasdaq, going up 17 percent on Thursday afternoon (May 13), as investors took to social media with #AMCSqueeze to push up the price of shares, Bloomberg reported on the same day.

On Twitter, #AMCSqueeze trended at the top spot. Additionally, per Bloomberg, Facebook’s CrowdTangle data tool reported about 133,000 Reddit interactions over the past few days for the term AMC.

AMC’s share price at 3:30 p.m. was $12.82 after hitting $12.11 at about 1 p.m. Shares closed at $12.77, according to Yahoo Finance. On Wednesday (May 12), AMC shares closed at $10.32.

Headquartered in Leawood, Kansas, the entertainment company said it had raised about $428 million by selling shares, AMC CEO Adam Aron tweeted a little past noon on Thursday. He said that the fresh funds give the company a stronger foundation to “tackle the challenges and capitalize on the opportunities ahead.”

Inflation worries have largely depressed share prices in recent days, down about 7.6 percent compared with AMC’s 30 percent boost, according to Bloomberg data.

AMC and GameStop became the face of meme stocks after a January rally that triggered a share price escalation for both companies. That rally boosted GameStop’s share price to $336.

That rally also pulled AMC out of $600 million in debt through bond conversion. AMC reported a $900 loss million in the third quarter of 2020, and it was speculated that the company was barely hanging on.

The gamification of the stock market was made possible due to the intersection of social media and digital trading platforms like Robinhood. While more people had access to investing for the first time, the social media chatter and associated decisions were largely devoid of any substantial information about financial literacy.