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stock was halted Wednesday, something that often happens when news is set to be released. That was not the case with AMC shares.
One reason stocks can be halted is for being too volatile. AMC (ticker: AMC) stock moved from around $50 at 12:15 p.m. to over $60 a little more than 10 minutes later. That more-than-20% move put the stock up 90% on the day. Needless to say, AMC is trading at an all-time high.
Some users looked to single out Robinhood, which was among the brokers that drew ire from retail investors for limiting trading in certain meme stocks back in January. Robinhood clarified in a post on Twitter that this recent halt was not limited to its platform, and was automatically triggered due to volatility.
Investors could have been forgiven for expecting some news to be released. A 90% move in one day doesn’t happen all that often—even in so-called meme stocks—and AMC has been talking about raising money to make acquisitions. No announcements have been forthcoming.
The halt briefly took a little bit of the wind out of AMC’s sails—the stock immediately fell back below $50 once trading resumed, but shares rallied back and closed up 95% at $62.55.
As with GameStop’s rise in January, nonfundamental factors like short interest and options activity are among the usual suspects. Some 582.2 million shares had traded by 1:50 p.m. Wednesday, well above the 65-day average of 110.7 million, while 2.1 million calls and 1.1 million puts had traded as well. While it’s hard to know what caused the move, options trading has likely contributed to the volatility.
AMC wasn’t the only meme stock in play on Wednesday.
(BBBY) was up 62%, while
(GME), the original meme stock, was up 13%.
The moves have brought out the usual critics, befuddled by the lack of fundamentals behind the skyrocketing stock prices.
“I never would have believed it, but the recklessness of a segment of retail investors appears to have no bounds in this market,”
Whitney Tilson
of Empire Financial Research wrote in a note Wednesday. “This type of short-term rally is to be expected, and for stocks like these, this is an opportunity to add to a short or put position because it’s clearly a dead-cat bounce.”
Write to Connor Smith at connor.smith@barrons.com and Ben Levisohn at ben.levisohn@barrons.com
