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New investors have joined the AMC stock market and the company’s massive gains in the past few months are attributed to these newcomers.
AMC Entertainment Holdings Inc (NYSE: AMC) stock closed Wednesday trading at $62.55, up over 95%. Prices hit as high as $72.62, way above Friday’s intraday high of $36.72. Over 710 million shares were traded by the end of the day, which is almost double outstanding AMC shares. AMC’s 30-day average daily volume stands at 143 million shares.
The last time the meme stock had closed at a record high was 6 years ago when prices reached $35.86. Towards the end of last month, high trading by Reddit enthusiasts brought a stock surge of 35.6%, setting the price to $26.52.
At the time of writing, in the pre-market, the stock is 12.50% up, trading at $70.37.
New investors have joined the AMC stock market, and the company has embraced them, as they attribute their massive gains in the past few months to new investors. To smoothen the path of communications with the newcomers holding stock, the company offered free popcorn and promised exclusive movie screenings.
Mudrick Capital and AMC Stock
On Tuesday, AMC sold 8.5 million newly acquired shares to Mudrick Capital Management. From the sale, AMC raised $230.5 million which it planned to use in making acquisitions, deleveraging its balance sheet, and upgrading its theaters.
In a shocking turn of events, the hedge fund gave up all of its stake for profits on Tuesday, missing out on over 300 million during Wednesday’s stock soar. Generally, such actions would have resulted in a devaluation of the stock and quick sell-offs, since newly issued shares caused a dilution effect. For AMC, however, stock prices remained on an upward trail.
More Meme Stocks Play Up
Other meme stocks gaining favor among Reddit traders include the heavily shorted Blackberry, GameStop, Bed Bath & Beyond. Notably, Bed Bath and Beyond stock went up 62% closing at $44.19, the highest since January 27.
Since the year began, build-up in AMC stock has seen CEO Adam Aron’s wealth swell by over $200 million. The tremendous company growth was very much welcomed especially since the business went down significantly in the aftermath of the pandemic. There were no customers and cinemas shut down for a couple of months. With no income, AMC defaulted on rent payments and was brought to the threshold of bankruptcy.
The pandemic-related challenges pulled in short-sellers but tables turned on them as shares rallied over 116%. S3 partners estimate that short-sellers counted 1.23 billion in losses with the stock soaring over 2,850% year to date.