After Gamestop Success, /r/WallStreetBets Turns Its Sights On AMC, Causing Further Stock Market Chaos
After an astounding success pumping Gamestop's stock, Redditors have turned their eye towards another stock from a struggling company: AMC.
The movie theater chain has been brutally hurt by the COVID-19 Pandemic, and like Gamestop, was thought to be on death's door. This made it a popular target of short-sellersβhedge-fund traders who would borrow the stock and wait for its price to drop significantly before selling it, turning them a profit when they buy it back. However, a rush of people buying back the stock and Redditors of /r/wallstreetbets buying AMC stock in the hopes of a "short squeeze" have sent AMC's stock soaring up 230% as #SaveAMC trended on Twitter.
Wall Street has been scrambling to counter the Redditors who have been gaming the system. Trading was halted after 10 minutes today but after it reopened, AMC stock, once trading at a meager $4 a share, was trading at $16.27.
The efforts to "Save AMC" worked; according to CEO Adam Aron, the company secured enough capital to survive deep into the year. "This means that any talk of an imminent bankruptcy for AMC is completely off the table," he said.
The enthusiasm has become infectious, as basically a subreddit has memed its way into being a major factor in Wall Street.
There are going to be so many people who lose so much money investing on this insane wave. I am one of those people. $GME $AMC TO THE MOON LETβS GO ππππππΌπππΌ
β NoahJ456 (@NoahJ456) January 27, 2021
$AMC #SaveAMC we got this.$100 by Friday pic.twitter.com/rS7vMiK6i4
β Coco Tolentino (@ChocoLocoTol) January 27, 2021
The CEOs at GameStop and AMC this week. #SaveAMC $AMC #GME pic.twitter.com/MHVUOihmAH
β Nomaan Ali (@ali_nomaan) January 27, 2021
Bed, Bath and Beyond and Kodak are other stocks that have seen significant rises in Reddit's battle against short sellers.
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Chewybunny
$NAKD is my jam
+180 in one day.
A Concerned Rifleman
If it becomes this easy to manipulate stock, I wonder how it will affect stock going forward.
winton overwat
Either the government will drop the hammer on this or the shorts will learn to be less agressive in their bearishness.
Chewybunny
It's not going to look good for government dropping the hammer on this. And I wonder if it's going to create a backlash.
ObadiahtheSlim
Well the AMC thing sounds like bots pushing a pump and dump scheme. Which is already illegal. As for the Gamestop, early indications are just that some people realized too many people betting on gamestop failing and people moving in to take advantage of it. That's business as usual on Wall Street.