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AMC Stock Tops GameStop's Surge Amid Reddit-Hedge Fund Game Of Chicken

BILL PETERS12:29 PM ET 01/27/2021

AMC stock launched more than 200% higher on Wednesday — the latest spike for a heavily shorted stock amid an increasingly epic, meme-driven battle between smaller investors and hedge funds betting those stocks will fall.

Shares of movie theater operator AMC Entertainment (AMC), ailing due to coronavirus-related shutdowns, were up 172% at 13.50 in the stock market today as trading resumed from a midday halt, outstripping GameStop's (GME) 107% pop which was also briefly halted.

AMC stock had stretched as high as 20.36 earlier in the day in massive volume. More than 550 million shares exchanged hands, far above average levels.

The company had around a quarter of its outstanding shares in short interest. Trading in AMC stock was halted several time during the day.

The run arrives after investors, notably in the Reddit board r/wallstreetbets, sent video game store chain GameStop, another heavily shorted stock, on a moonshot run this week. Retail chain Bed Bath & Beyond (BBBY), another such stock, catapulted higher this week as well.

Virgin Galactic (SPCE) and BlackBerry (BB), which have also been targets of earlier short interest, continued rallying Wednesday, up 31% and 14%, respectively.


'Hours Creating Memes' For AMC Stock
As larger investors took short positions in those stocks — or a bet that shares would fall — smaller investors, like those on Reddit, appeared to be piling in with the intent to drive those stocks higher.

In doing so, the individual investors upend the larger investors' bets and force them to scramble to cover their losses, in turn pushing the stock even higher.

According to the Verge, people on r/wallstreetbets' Discord server "spent hours creating memes and spamming AMC emoji in an effort to convince thousands of people to buy AMC stock." Mentions of "AMC" — sometimes paired with rocket ship and popcorn emojis — littered the board's daily discussion thread on Wednesday.

Charles Schwab tweeted that due to a "technical issue, some clients are experiencing issues with online trading."

The company was not immediately available for comment. E-Trade, another trading platform, was also not immediately available for comment.