After giving the financial world a very public black eye by causing GameStop stock prices to seemingly soar out of nowhere, day traders on Reddit have turned their attention to AMC Entertainment, and it may have just pulled a major movie theater industry player from the brink of bankruptcy. In the midst of the GameStop chaos, AMC’s stock also began to dramatically surge, which is a surprise considering the company is struggling even more than GameStop due to the pandemic. With Hollywood continuing to delay major blockbusters even further into 2021, and audiences being understandably hesitant to sit in a theater for over two hours, AMC was heading for collapse until this “new class of traders” stepped in. Via CNBC, here are the numbers:
AMC jumped 26% on Monday, and 12% on Tuesday, and is now up more than 370% this week. On Monday, the company announced it had secured enough financing to remain open and operational deep into 2021.
“This means that any talk of an imminent bankruptcy for AMC is completely off the table,” said CEO Adam Aron.
According to The Hollywood Reporter, r/Wallstreetbets became intensely focused on AMC on Tuesday as the coalition of Reddit day traders zeroed in on a new target to stick it to hedge funds, and if it happens to save movie theaters in the process, even better. “AMC to the moon boys!” one user wrote. “Do not sell. Let’s bankrupt another hedge fund!” User Starduststones also jumped in with: “Support out local theaters, and for sure… YOLO!”
The increased attention on r/Wallstreetbets disrupting the market has earned the praise of Reddit co-founder Alexis Ohanian who tweeted out support for the day traders on Wednesday morning.
💡 @andrewrsorkin you framed it right – that's the sentiment, the public doing what they feel has been done to them by institutions. This is an echo of what we've seen social media enable the public to challenge institutions for the last decade.
— Alexis Ohanian Sr. 7️⃣7️⃣6️⃣ (@alexisohanian) January 27, 2021