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An AMC Theaters logo above one of the company’s movie theaters shut down by the coronavirus COVID-19 in Rosemont, Illinois.
Scott Olson / Getty Images
AMC Entertainment Holdings
trades at a new 52-week high on Wednesday, entangled in a strange euphoria hitting several stocks of oppressed companies.
The shares (ticker:
AMC
), one of the worst performances of the past year, jumped a whopping 300% in morning trading and was shut down several times due to extreme volatility.
AMC shares rallied 611% in spite of several diluted share sales by the company in recent months. The trading volume is more than 54 million shares according to FactSet. Nearly 40 million shares are sold short.
AMC is currently trading about 180% up from about $ 14. Stocks are up 105% in the past year, compared to gains of 15.8% in the S&P 500.
But AMC has been in the doldrums for much of the past year. The pandemic forced the largest cinema operator to close locations or limit occupancy, killing box-office sales. Other cinema chains have struggled through the same problems.
The stock joins a small group of companies stuck in a strange push and pull between professional short sellers, who take bearish positions, and private investors who use Reddit forums and Robinhood accounts to buy and encourage others to do so .
The greatest example is of course
GameStop
(GME), the video game retailer whose shares have skyrocketed above $ 350.
Bed Bath & Beyond
(BBBY), up 30% on Wednesday,
Blackberry
(BB), up 15%, and
Etsy
(ETSY), which is a decrease of 3%.
According to MarketWatch, the surge in trading disrupted several online brokers on Wednesday.
AMC has raised money to absorb it until the pandemic subsides and moviegoers return to theaters in the record numbers they did in 2019. This week, the company’s CEO Adam Aron said in a statement that with $ 917 million raised since mid-December, bankruptcy was off the table.
In recent months, it has been considered whether the company could not raise enough money to survive.
The fact that AMC has sold stock to raise capital may make the high stock price more bearable, said B. Riley analyst Eric Wold.
“While the recent move in AMC shares has been extraordinary, we remain positive about the outlook for the domestic box office emerging from the pandemic and believe management’s success in securing sufficient capital to face bankruptcy. avoidable in the short term has been clearly positive for investors. , ‘Said Wold Barron’s in an email. “And as AMC continues to strengthen its capital structure and liquidity, we can imagine the move of the stock being welcome for the company.”
An AMC spokesperson was not immediately available.