AMC: AMC Stock Erases Over 40% of Daily Gain as Traders Get Burned by Speculative Rally

Movie theater chain made good use of the Monday pump and finalized the sale of 72.5 million shares, raising $250 million in the process.

• AMC stock AMC blasted off more than 300% in just the past two days to hit a 9-month high of $11.88 a share. Shortly after the ultra-fast rise reached a turning point on Tuesday, the stock erased about 40% of the new gains to close at $6.85 a pop. The stomach-churning volatility has traders scrambling to figure out which way shares will go. And given AMC’s relatively small market cap of $2 billion, the fluctuations are tough to predict.
• The movie theater used the opportunity to finalize its planned share sale launched in late March. AMC raised $250 million in the process, dumping a total of 72.5 million shares through Monday’s session close at an average price of $3.45 a piece. The wild ride continued Tuesday when shares of AMC closed higher by 32%, having skyrocketed more than 100% earlier in the session. Early on Wednesday, futures on AMC indicate a 30% jump at the opening bell.
• The two-day adventure in AMC trading has rekindled the retail traders’ dreams of diamond hands, moon landings, and rocket ships. Roaring Kitty, the person who started the Reddit trading revolution with his GameStop long buy during Covid, made a surprise comeback on Monday. The move triggered a huge buying wave in GameStop shares, spilling over to AMC shares. And it made analysts question their knowledge of efficient markets and fair prices.