Odeon owner AMC Entertainment soars amid new ‘memestock’ rally
AMC Entertainment Holdings Inc (NYSE:AMC), the owner of the UK’s Odeon cinema chain, saw itself the benefit of a fresh ‘memestock’ rally overnight the saw its shares close at their highest level in four years.
At the closing bell on Wall Street on Thursday, the movie theatre group notched a gain of 35.6% to US$26.52, leaving it with a market cap of just over US$11.9bn.
AMC was one of the beneficiaries of a surge in the share price of several companies earlier this year, most notably GameStop Corp (NYSE:GME), as a community of retail traders headed by Reddit forum r/wallstreetbets began piling into the stock in a bid to inflict massive losses on short sellers.
While GameStop was the spark for the rally due to heavy shorting activity against the stock, the frenzy quickly spread towards other shares deemed to have been targeted by short sellers such as AMC and mobile phone maker Blackberry Ltd (NYSE:BB).
With a large proportion of AMC shares still shorted, the bears are likely to be nursing fresh wounds following the latest rally.
Aside from its memestock reputation and retail following, AMC’s fortunes are also likely to have been lifted by the relaxation of pandemic restrictions in its markets, which is likely to see a boom in cinema demand after a long period of lockdown.
The recent surge also means AMC’s shares are up 1,219% in the year to date, although the shares are still below their all-time high of around US$35.68 reached in March 2015.
However, the stock was continuing its upward trajectory in pre-market trading on Friday morning, rising 9.7% to US$29.08.