(Reuters) -Shares in AMC Entertainment soared on Thursday, last up around 34% at $26.33 and the top volume trade on U.S. exchanges as investors on social media forums scooped up shares in the cinema operator, pushing its market value above $13 billion at the session high.
AMC gained momentum after hitting $20.36 early in the session, its peak for late January when it was caught up in a surge of buying by retail investors inspired by online investor forums such as Reddit’s WallStreetBets.
Trading volume and price gains accelerated in afternoon trading before hitting a session peak of $29.76 at around 2 p.m. EDT (1800 GMT) and then paring gains slightly.
It was up about 1,200% year-to-date.
Analysts covering the stock say they are optimistic business trends will improve for AMC as consumers become more confident about returning to movie theaters after their COVID-19 vaccinations and flock to summer releases.
However, they pointed to enthusiasm among day traders following meme stocks as main the reason for Thursday’s gains, rather than fundamental business reasons.
“This is not driven by institutional demand. This is driven by retail day traders … it’s not trading on fundamentals. It’s a meme,” said Wedbush Securities analyst Michael Pachter who has a $6.50 price target on the stock. “It’s just silly.”
With about 665 million shares already changing hands an hour before the market close, Thursday’s volume was the highest since Jan. 27 and already eclipsed AMC’s 450 million total shares outstanding according to the latest data from Refinitiv.
About 20.32% of AMC’s float have been sold short according to the latest data from S3 Partners which says AMC short sellers have been covering some of their exposure lately.
Shorts were down about $1.69 billion in year-to-date mark-to-market losses, according to S3.
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