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AMC Stock Continues to Rocket Higher as the Meme Trade Heats Up – Barrons

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An AMC theater in Burbank, Calif., on March 15.

Valerie Macon/AFP via Getty Images

AMC Entertainment

stock’s meme-fueled run continued on Tuesday after the company said it sold $230.5 million in stock to Mudrick Capital Management. The rally held up even after a report from Bloomberg said the firm promptly sold off its stake at a profit.

AMC stock (ticker: AMC) closed up 23%, to $32.04, on Tuesday. Fellow meme stock GameStop (GME) was up 12%, to $249.02.

According to AMC, Mudrick Capital paid about $27.12 a share for 8.5 million shares—a 3.9% premium to AMC’s close on Friday at $26.10. That appears to have sparked further enthusiasm among retail investors who are betting on AMC stock, while it was bad news for the stock’s many short sellers.

Mudrick’s bet on AMC was reportedly short-lived. Bloomberg reported, citing a person with knowledge of the matter, that Mudrick sold its entire stake in AMC on Tuesday at a profit, adding that the firm believed the stock was overvalued, trading higher due to “day-trader enthusiasm.” The firm declined a request for comment.

Though analysts have argued that meme stocks like AMC and


are trading on hype and supply and demand, rather than genuine fundamental analyses, the cash both companies have raised from recent stock sales is real and has helped them sure up their respective balance sheets amid the pandemic. On Twitter, AMC CEO Adam Aron said he sees opportunities for AMC to acquire theaters from struggling competitors.

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