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A frenzy of buying of AMC Entertainment stock triggered several trading halts Wednesday, with meme-stock traders fueling a surge of more than 100%.
Trading was halted several times for brief periods as shares changed hands at a brisk pace. More than 500 million shares have been exchanged so far Wednesday. Its 30-day average volume is 143 million shares.
At one point, AMC’s price peaked as high as $72.62, far above its previous intraday high of $36.72, which occurred on Friday. Its closing record is $35.86, set on March 23, 2015, according to FactSet data.
The manic activity comes despite a report that a hedge fund had sold its stake in the movie theater company. On Tuesday, AMC reported it had sold 8.5 million newly issued shares to Mudrick Capital, the latest in a series of capital raises for the stock, a favorite of Reddit traders. The hedge fund later turned around and sold all of its AMC stock for a profit, according to Bloomberg News.
AMC said in a securities filing that it raised $230.5 million through a stock sale to the investment firm. The movie theater operator said it would use the funds for potential acquisitions, upgrading its theaters and deleveraging its balance sheet.
AMC’s business was effectively halted during the pandemic, as cinemas were shuttered in most of the country for months. With no money coming in from ticket sales and concessions, AMC fell behind on its rent. On the brink of bankruptcy, short sellers swarmed the stock.
Retail investors inspired by Reddit chats have used their growing numbers to fight back. Last week, investors shorting the stock were estimated to have lost $1.23 billion as the shares rallied more than 116%, according to data from S3 Partners. The stock is up more than 2,800% year to date.
The company has been making special efforts to communicate with this new investor base. On Wednesday, it said it launched a new portal on its website for its retail investors. The site includes special offers, including a tub of free popcorn and exclusive movie screenings.