On Wednesday, NYSE:AMC fell 15.04 percent as meme stocks took a beating.
Even with Jim Cramer’s encouragement, #AMCDay fails to have the same impact as the previous year.
To placate individual investors, CEO Adam Aron may have wasted an opportunity to pay down debts.
NYSE:
The recent short squeeze at AMC is done, and it’s about time we made that official. AMC stock dropped 15.04 percent on Wednesday, closing at $33.43. The stock has dropped 53% from its all-time high of $72.62 just four weeks ago. When it comes to meme stocks, the old adage holds true: the faster the stock climbs, the faster it falls.
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Earlier this week, retail investors went to social media in an attempt to orchestrate another short squeeze. On Twitter and Reddit, the hashtag #AMCDay was trending, and the previous time this happened, it caused a big price drop into the $60 level. Even notorious CNBC host Jim Cramer joined in on the act this time, tweeting “AMC Buyers Hold!” Given the stock’s dramatic drop over the last few sessions, many assume the most recent short squeeze iteration is done.
In retrospect, AMC CEO Adam Aron’s refusal to allow a shareholder vote on whether or not to sell further shares of the company could come back to bite them in the future. Aron sided with individual investors, announcing that the company would not issue any new shares in 2021, preventing further shareholder dilution. Of all, if AMC had raised that money, it could have paid off most of its debts, and the situation appears far worse now that the stock price has been halved./n
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