On Wednesday, retail traders on social media are attempting to achieve what Natasha Romanoff, or the “Black Widow,” was unable to do on Monday and Tuesday: raise the share price of AMC Entertainment AMC, -4.37 percent.
Despite the Marvel Cinematic Universe’s blockbuster return to theaters on Friday, with Scarlett Johansson’s standalone “Widow” film grossing $80 million, breaking the previous post-pandemic record of “F9’s $70 million opening weekend in June,” shares of cinema chain AMC fell nearly 15% in the first two trading days of the week, a drop that enraged bullish investors in AMC on internment.
Retail traders blamed the stock drop on their old enemies, short selling hedge funds, who they believe have regained control of the stock price, citing AMC’s announcement on Monday morning that “Approximately 3.2 million people watched movies at AMC’s United States and international theatre locations between Thursday, July 8 and Sunday, June 11,” the highest turnout in 16 months. While some investors may have interpreted the fact that “Black Widow” also grossed $60 million from premium streaming downloads on Disney+ as evidence that the theater economy is still under siege, Redditors were not impressed. In recent weeks, AMC shareholders have become practically interactive with CEO Adam Aron, even pressuring him to approve a new share offering that would have paid down the theater chain’s still large post-COVID debt load. They decided to rally behind each other this week, buying whatever AMC stock they could get their hands on after the price dropped below $40 for the first time since its meteoric rise in late May and early June. They did it using hashtags, declaring Tuesday to be another #AMCDay. By mid-Tuesday, social media was filled with speculation that hedge funds were utilizing ladder assaults and options spoofing to artificially decrease AMC’s stock price, complex trading methods that have long been part of the retail trading community’s complaints against mainstream finance. The removal of AMC from the New York Stock Exchange’s threshold list on Friday was one data point that traders on social media were particularly interested in. That list is made up of equities that have failed to settle for five trading days in a row, putting them on high alert for naked shorting. Many Twitter and Reddit users viewed that move as highly suspicious, urging their fellow self-proclaimed “Apes” to hold their shares as the price swooned in order to smoke out the naked shorts in the long grass. “At 4 a.m. in premarket, there are no sellers, and no one is dumping this stock. AMC would not have been on the threshold list if there were sellers,” Reddit user popsmoke1122334455 wrote Tuesday afternoon. “Separate yourself from your feelings.” Short interest in AMC stock increased marginally on Monday and Tuesday, according to Fintel data. In the early hours of Tuesday, even Jim Cramer, a long-time critic of meme stocks, joined the chorus of those asking AMC believers to keep their hands “diamond,” tweeting “AMC purchasers HOLD!”
Despite the social media frenzy, which saw #AMCDAY become Twitter’s second-most popular term, AMC volume was little over half of its usual daily trading volume, and the price stayed stuck just around $40. That did not seem to dampen the enthusiasm of some AMC bulls, who stated that the campaign would continue until Wednesday. @AMC Apee tweeted, “Dear HEDGEFUNDS.” “INVESTORS IN RETAIL NEVER GIVE UP. I’VE BEEN HOLDING FOR SEVEN MONTHS AND WILL KEEP HOLDING.” Despite this, AMC stock was down more than 3% in pre-market trading./n
