- AMC shares jumped as much as 24% Monday to reverse Thursday and Friday’s losses.
- The stock closed out last week 83% higher overall, thanks to a retail investor-driven rally.
- The company could be set for a short squeeze, according to S3 Partners.
- See more stories on Insider’s business page.
Shares of AMC Entertainment popped as much as 24% Monday, reversing two-days of losses after the stock hit record highs last week amid renewed hype from retail traders.
On Monday, AMC, the world’s largest movie-theater chain, remained one of the top talked-about stocks on social media, second only to BlackBerry, according to a report from Quiver Quantitative.
Shares jumped as high as 126% to a record high last Wednesday, before paring gains Thursday and Friday to close out the week 83% higher overall.
Retail traders, which make up about 80% of the stock’s investor base, hyped up the company on social media sites like Twitter and Reddit to help drive last week’s rally. They rallied around AMC again Monday with the word “short” frequently mentioned with posts about the stock, HypeEquity data showed.
AMC might be close to a short squeeze – meaning those betting against the stock may have to cover their positions – Forbes reported, citing S3 Partners’ Ihor Dusaniwsky, who said the company’s recent rally has put it into “short squeeze territory.” MarketBeat data show the stock has a 21% short interest rate, in line with that of GameStop, the original meme stock.
AMC executives benefited from last week’s gains with six of them cashing in on the stock gains, according to Friday filings with the Securities and Exchange Commission. In total, the executives sold 150,000 shares and made more than $8 million.
Hedge-fund Mudrick Capital also cashed in on millions of shares last week after just announcing it had purchased the stock. It said AMC was overvalued.
The company also offered millions of new shares, and its Chief Executive Officer Adam Aron hopes to offer even more. The CEO, who has catered to his large base of retail traders, went on a popular YouTube channel last week to make a case for selling more stock.
The company told investors last week that they could lose their money if they buy into the stock amid the rally.
Shares traded 18% higher at $56.58 at 11:34 a.m. in New York.