Street performers in Minnie Mouse costumes walk past an AMC movie theater in the evening in the Times Square neighborhood of New York City on October 15, 2020.
Amir Hamja | Bloomberg | Getty Images
Shares of film giant AMC Entertainment, more than tripled, tripled during pre-market trading on Wednesday, amid intense trading activity on some of Wall Street’s shortest stocks.
Shares of AMC advanced 230% ahead of Wednesday’s opening bell, while GameStop rose 67%.
Individual investors are creating short pressures by accumulating these names, while hedge funds on the other side rush to cover their losses. They promote their activity on the walldreetbets Reddit board, which has 2.8 million members. AMC seemed to be a topic of growing interest on the board.
The influence of retail investors, most evident on GameStop, has captivated the street in recent days and speaks to a new class of traders who grew up in the midst of the pandemic.
“The focus has shifted from big-cap technology /‘ retail favorites ’to a largely ignored corner of much shorter small-cap stocks,” Barclays said Tuesday in a note to clients. “Within a month, retail has significantly affected stock and price sentiment in these strongly abbreviated names, consolidating the dominance of retail options investors.”
AMC currently has 24% of its floating tied to short-term interest. Meanwhile, GameStop’s short interest rate stands at 138%, according to FactSet.
AMC jumped 26% on Monday and 12% on Tuesday, boosting its weekly rise after just two days to more than 40%. On Monday, the company announced it had secured enough funding to stay open and operational until 2021.
“This means that any conversation about an impending bankruptcy for AMC is completely off the table,” CEO Adam Aron said.
For the month, AMC shares are up more than 130%. However, given the downward decline in stocks in recent years, a smaller increase, of course, now represents a much larger percentage.