Home https://server7.kproxy.com/servlet/redirect.srv/sruj/smyrwpoii/p2/ Business https://server7.kproxy.com/servlet/redirect.srv/sruj/smyrwpoii/p2/ AMC shares jump more than 20% as rally loaded with Reddit extends to another week

AMC shares jump more than 20% as rally loaded with Reddit extends to another week

The AMC Theater is pictured in Times Square in the Manhattan neighborhood of New York City, New York, June 2, 2021.

Carlo Allegri Reuters

AMC Entertainment, the meme that hit Wall Street recently, picked up double-digit figures on Monday as speculative trading in the troubled movie theater gained momentum.

Shares of AMC jumped 23% to about $ 57.71

per share in Monday morning trading, after a rally of 80% the previous week. Shares removed GameStop from the throne to become the star of Reddit’s infamous WallStreetBets forum, with retailers encouraged to pile up stocks and seek options.

The call option is an instrument that gives the investor the right to buy a share at a certain price within a certain period of time.

AMC won over 120% in June alone after 160% progress in May, increasing its rally in 2021 to over 2600%. Shares far surpassed their January highs amid GameStop’s trading craze, hitting a record of $ 72.62 a day last week.

Other meme shares also traded higher on Monday as momentum gained. Bed Bath & Beyond advanced 7%, while BlackBerry jumped above 8%. GameStop won nearly 6%.

Against the background of wild trade, TD Ameritrade introduced increased margin requirements of up to 100% for AMC and GameStop. The brokerage said it may also apply additional requirements to open trades with AMC options, which expire on Friday.

“#NakedShorts” and “#NakedShorting” were on trend on Monday as well as over the weekend, citing increased brief interest in AMC. Naked shorting is the illegal practice of short selling when the short-term interest of a stock may be greater than the traded shares on the market, sometimes due to inconsistencies between paper and electronic trading systems.

AMC has about 18% of its shares floating in the short market, compared to about 5% for average US shares, according to S3 Partners. Short selling retailers betting on AMC suffered $ 2 billion in losses last week, according to S3.

“It is extremely tempting to cut these stocks, but unless you have huge liquid resources, please try to resist the temptation, because these prices can reach unimaginable heights before settling to a reasonable estimate and you may have to cover the high point, “Interactive Brokers chairman Thomas Peterfy told CNBC’s” Squawk Box “on Monday.

“In the long run, stocks are always close to their core values, which in this case is much, much lower,” Peterfi added.

AMC took advantage of the mass rally last week by selling 20 million shares in two separate deals and generating about $ 800 million in cash. CEO Adam Aron has signaled that he wants to sell up to 25 million more shares.

– Kevin Stankevich of CNBC contributed with reporting.

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