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VOL. 45 | NO. 22 | Friday, May 28, 2021

AMC embraces its meme stock status, shares quickly double

The Associated Press

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After its movie theaters were shut and its stock was nearly left for dead because of the pandemic, AMC Entertainment is embracing the horde of fanatical investors who helped shock its shares back to life as part of this year's "meme stock" buying spree.

The company said Wednesday it's launching a program called AMC Investor Connect to keep in direct contact with those 3.2 million investors. Many bought AMC stock early this year, even when professional investors were running away, and helped lift it from less than $2 on Jan. 5 to as high as $72 in Wednesday afternoon trading.

AMC called them an "extraordinary base of enthusiastic and passionate individual shareholders," but many of them are just as likely to call themselves supporters who are merely piling into a stock they like and shaking up Wall Street along the way.

"After all, these people are the owners of AMC, and I work for them," AMC CEO Adam Aron said in a statement.

These smaller-fry buyers are known in the industry as "retail investors," to separate them from the pension funds, mutual funds and other institutional investors that typically dominate a company's ownership. At AMC, retail investors made up more than 80%, as of mid-March.

Retail investors have become a much more powerful force across the market in recent years. Easy-to-use trading apps and zero trading commissions have drawn in a new generation of traders. So did the pandemic, which meant millions of people were sitting on their couches with little else to do.

The power of social media has amplified their power further, with threads on Reddit, Twitter and elsewhere quickly building momentum for some stocks. It was most shockingly apparent early this year when AMC, GameStop and a handful of other beaten-down stocks suddenly soared to awe Wall Street.

Leawood, Kansas-based AMC soared 525.5% in January alone, after plunging nearly 71% the prior year. GameStop had an even more breathtaking move, vaulting 1,625%. In some cases, the quick gains short-circuited heavy bets made by professional investors that the stocks would fall, which ultimately amplified the upward move.

The increased weight of retail investors has helped cause sharp price swings and heightened critics' calls that investments across different markets have inflated into dangerous bubbles, such as in the volatile world of cryptocurrencies.

Bitcoin climbed above $60,000 early this year, only to fall back toward $38,000, according to Coindesk. Dogecoin, which is trying to shed its image as a joke cryptocurrency, has soared more than 8,000% in 2021.

At AMC, much of professional Wall Street says the stock has also climbed too high. Some analysts peg its value closer to $5 than its perch of $63 in Wednesday afternoon trading.

Instead of focusing on such analysts, though, AMC Investors Connect, will send communications from its CEO directly to retail investors. It will also offer special screenings, discounts and other promotions to shareholders. The first is a free large popcorn while visiting a theater this summer.

The market's initial reaction? A summer blockbuster. AMC's shares roughly doubled on Wednesday, and trading in its stock was temporarily halted at least four times because of the sharp volatility.

AMC's announcement comes a day after it said that it is raising  $230.5 million through a sale of 8.5 million shares of stock, cashing in on the frenzy that has sent its stock price up more than 2,800% this year.

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RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 0 0 0
MORTGAGES 0 0 0
FORECLOSURE NOTICES 0 0 0
BUILDING PERMITS 0 0 0
BANKRUPTCIES 0 0 0
BUSINESS LICENSES 0 0 0
UTILITY CONNECTIONS 0 0 0
MARRIAGE LICENSES 0 0 0