The apes will get free popcorn.
Not that they’ll need it.
After its movie theaters were shut and Wall Street left its stock for dead because of the pandemic, AMC Entertainment is embracing the horde of fanatical investors who shocked 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 stay in direct contact with those 3.2 million investors. It promised that it would provide special benefits to its investors—starting with free popcorn.
Shares doubled on Wednesday. Year to date, shares are up over 3,000 percent.
AMC was one of the stocks that gained popularity on the WallStreetBets message board, where people declared they “like the stock” and often describe themselves as “apes,” “degenerates,” and “retards.”
Many bought AMC stock early this year, even as professional investors ran away, and helped lift it from less than $2 on Jan. 5 to as high as $72 on Wednesday.
“Many of our investors have demonstrated support and confidence in AMC. We intend to communicate often with these investors, and from time to time provide them with special benefits at our theatres. We start with a free large popcorn on us, when they attend their first movie at an AMC theatre this summer,” AMC chief executive Aron Adam said Wednesday.
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 suddenly sitting on their couches with little else to do.
Social media has amplified their power further, with threads on Reddit, Twitter and elsewhere quickly building momentum for some stocks. It was most apparent early this year when AMC, GameStop and a handful of other beaten-down stocks suddenly surged to shock and 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 hedge funds that the stocks would fall, which ultimately escalated the upward move.
Besides sharp swings, the increased weight of retail investors has also heightened critics’ warnings that prices for investments across 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 closing price of $62.55 on Wednesday.
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 offer is for a free large popcorn while visiting a theater this summer.
The market’s initial reaction to the new initiative was akin to a summer blockbuster. AMC’s shares nearly doubled on Wednesday to set a record closing high for the first time in six years, and trading in its stock was temporarily halted four times through the afternoon because of the sharp volatility.
Other meme stocks were also big movers on Wednesday, with GameStop rising 13.3%, in sharp contrast to the rest of the listless stock market. The S&P 500 inched up by 0.1%.
AMC’s announcement came a day after it said that it was raising $230.5 million through a sale of 8.5 million shares of stock. Those shares were reportedly sold by the investor, a hedge fund called Mudrick Capital, after AMC stock rallied on Monday, for a one-day profit of around $30 million to $40 million. If Mudrick had held the shares through today’s close, that profit would have been closer to $300 million, according to CNBC.
Mudrick’s sale of the shares on Monday angered some of the passionate AMC investors who berated the hedge fund on Twitter and promised to drive shares up high enough that the company would regret not holding on for longer.
–The Associated Press contributed to this report.
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