Meme stocks played role reversal with AMC Entertainment’s /zigman2/quotes/200235402/composite AMC -2.42% Thursday surge pulling up shares in retail stock GameStop /zigman2/quotes/203755179/composite GME -4.37% too.
Individual investors showed a frothy interest in AMC all day as users on Reddit and Twitter push an #AMCSqueeze hashtag, and mentions of the stock overall dominated the discussion among retail traders on Thursday.
“We didn’t wait this long for these puny numbers.. the concept you must understand : SHORTS MUST COVER, WE OWN THE FLOAT!” read one popular post on Reddit board r/amcstock.
AMC shares hit an intraday peak of $14.20, the highest since March 18, ending the day up 23.7% at $12.77, according to FactSet data.
The move higher came as the company completed its previously announced 43 million shares at-the-market equity offering, bringing in $438 million of fresh capital to the beleaguered theater chain.
According to Dow Jones data, AMC’s 23.74% rise was its largest one day percent gain since Jan. 29, 2021 when it gained 53.65%.
The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA -1.58% , S&P 500 index /zigman2/quotes/210599714/realtime SPX -1.31% and Nasdaq Composite Index /zigman2/quotes/210598365/realtime COMP -0.92% snapped a three-day skid , while trimming their weekly losses after soaring inflation data spooked markets.
An analyst at a popular broker-dealer for day trading platforms offered a evenhanded appraisal of AMC’s day.
“Retail demand for AMC shares continues to elevate the share price, and it is trading at a multiple unrelated to the company’s fundamentals,” said Wedbush Securities’ Alicia Reese. “That said, AMC is smart to capitalize on the retail interest and sell its shares at an inflated price tag, particularly if it uses the funds to reduce its debt.
Reese underscored that the share sale was already baked into her “Hold” rating on the stock. The faster it can reduce its debt, the faster it can return to its previous growth strategy of upgrading its European circuit and expanding in the Middle East,” she added.
GameStop, which usually plays the Alpha to AMC on the meme stock power ladder, also pumped higher on the day,adding 13.6%. But many gurus on social media platforms who see the videogame retailer as a value play were frosty towards the idea that they also were engineering another squeeze on AMC’s coattails.
“Amc is FUD and has nothing to do with us,” posted one user on r/Superstonk, a board dedicated to GameStop investors and using the pejorative acronym for “fear, uncertainty and doubt.”