AMC Entertainment rode the wave of “meme stocks” on Wednesday, hitting record highs.
The stock closed at a record high of $62.55 per share, nearly double its closing price on Tuesday. The previous closing record was $35.86, which was set March 23, 2015, according to data from FactSet.
At one point, AMC’s stock spiked to $72.62, well above its previous intraday high of $36.72 that occurred Friday.
As retailers have gathered around AMC, the movie theater chain has returned the favor.
AMC executives have embraced the new investors, who have brought huge profits to the company in recent months. On Wednesday, the company made special efforts to communicate with this new base by offering free popcorn and the promise of exclusive movie screenings to those who held its stock.
The manic activity comes despite a report that a hedge fund had sold its stake in the cinema business. On Tuesday, AMC reported that it had sold 8.5 million newly issued shares to Mudrick Capital, the latest in a series of capital increases for the company, a favorite of Reddit traders. The company raised $230.5 million from the sale and said it could use the money to make acquisitions, upgrade its theaters and reduce its balance sheet.
The hedge fund later reversed and sold all of its AMC shares for a profit, according to Bloomberg news.
Typically, such a sale leads to a sell-off because the newly issued shares dilute the value of the existing shares. Instead, the stock climbed higher.
Trading was robust on Wednesday. The stock was stopped several times as it rose to new heights. At the end of the day, more than 710 million shares had been exchanged, nearly double the number of AMC’s outstanding shares. The company’s 30-day average volume is 143 million shares.
Shares of other heavily shorted stocks such as Bed Bath & Beyond, GameStop and Blackberry were also caught in the shopping spree. Bed Bath & Beyond shares were particularly active, closing at $44.19, up 62%. That was the highest close since January 27.
Last week, Bank of America said chatter in these stocks was picking up again. Since then, the trade has been more active.
The run-up to AMC’s stock has seen CEO Adam Aron see his net worth soar by more than $200 million since the beginning of the year. It was a breathtaking change of fortune for the company, which saw its operations effectively shut down during the pandemic. Movie theaters were closed for months in most of the country. With no money coming in from ticket sales and concessions, AMC was behind on rent. On the brink of bankruptcy, short sellers swarmed over the stock.
Retail investors inspired by Reddit chats have used their growing numbers to fight back. Last week it was estimated that investors who shorted the shares lost $1.23 billion as the shares rose more than 116%, according to data from S3 Partners. The stock is up more than 2,850% so far.