Investors shorting “meme stock” AMC Entertainment Holdings are estimated to have lost about $512 million on Monday after a rally that sent the cinema operator’s shares up more than 15%, data from financial analytics firm Ortex showed.
By contrast, AMC short-sellers suffered $1.2 billion in mark-to-market losses for the week to May 28, when small-time traders on online discussion groups sent the stock up about 116% by triggering a phenomenon known as a “short squeeze”.
AMC shares were up 2% at $58.12 in premarket trading on Tuesday. The stock has surged more than 2,580% so far this year, riding a wave of support from individual traders who have come together on online forums such as Reddit’s Wall Street Bets.
Recent reports from brokerages Fidelity and Freetrade show AMC has been the most traded stock by their customers, many of whom are small-time investors.
Market sources told Reuters last week that the volatility in AMC shares had led some professional traders to use options to limit their risk as they make bearish bets on the stock.
AMC has raised funds in recent weeks by issuing fresh equity to hedge fund Mudrick Capital and selling stock “at-the-market”, as it capitalizes on the blistering rally in its stock. It plans to use the proceeds to repay debt and for potential acquisitions of theaters.
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