New meme stock: AMC share price nearly doubles
AMC launched Investor Connect in response to better communicate with shareholders.
COURTNEY CROW/New York Stock Exchange via AP
On the New York Stock Exchange, Craig Spector, left, works with fellow traders on the floor, on June 2. AMC stock prices nearly doubled after achieving meme status.
After its movie theaters were shut and its stock nearly left for dead because of the pandemic, AMC Entertainment is embracing the horde of 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. Many bought AMC stock early this year, even as professional investors ran away, and helped lift it from less than $2 a share on Jan. 5 to as high as $72 on Wednesday.
Today, AMC and I launch an innovative effort to communicate often with AMC shareholders. #AMCInvestorConnect gets you AMC Stubs benefits and ***SPECIAL SHAREHOLDER REWARDS*** for those who patronize AMC Theatres in the U.S. Sign up is completely free at https://t.co/b5l62CQlD0 pic.twitter.com/h42VGCCD1I
— Adam Aron (@CEOAdam) June 2, 2021
AMC called them an “extraordinary base of enthusiastic and passionate individual shareholders,” but investors are more likely to call themselves supporters who are taking the stock price “to the moon” and shaking up Wall Street along the way.
“After all, these people are the owners of AMC, and I work for them,” AMC CEO Adam Aron said in a statement.
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 as easy-to-use trading apps and zero trading commissions have drawn in a new generation of traders.
These people are the owners of AMC, and I work for them.
— Adam Aron CEO of AMC
Social media has amplified their power, with threads on Reddit, Twitter and elsewhere quickly building momentum for some stocks. The investors’ power was most apparent early this year when AMC, GameStop and a handful of other beaten-down stocks suddenly surged.
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.
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 said 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.
Other meme stocks were also big movers 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 it was raising $230.5 million through a sale of 8.5 million shares of stock, cashing in on the frenzy that has sent its stock price up 2,850% this year.
