AMC Entertainment (AMC) shares came out of the gate strong today, giving Redditors cause to celebrate even as the company’s biggest shareholder, Dalian Wanda Group, ran for the exits last week. Famous Reddit forum WallStreetBets has led the rally in the AMC stock price this year as the group of individual investors looks to turn the tables on short-selling hedge funds and leave them holding the bag in the interim — just as they did with GameStop (GME) stock.
While Reddit investors’ risky gambit continues to play out in their favor, short-sellers are feeling the pain for a change. AMC is one of the three most shorted stocks alongside GME and Virgin Galactic (SPCE), all of which are trading in the green today. Short-sellers are at risk of losing close to USD 400 million across this trio of stocks as a result of today’s activity alone, as per financial analytics firm Ortex.
In recent days, China’s Dalian Wanda Group unloaded most of its stake in AMC, according to a U.S. SEC filing, cashing in on its holdings to the tune of nearly USD 430 million. Dalian, which purchased the movie chain in 2012 and had reportedly been looking for a way out since the pandemic, benefited from Reddit’s AMC fever. While it still owns 10,000 AMC shares, it could no longer sit on the sidelines after the movie chain’s stock soared 580% year-to-date.
AMC investors are celebrating the fact that Dalian Wanda finally pulled the plug, saying that the investor had been a thorn in their side anyway.
AMC has also received a tailwind after making it onto a number of Las Vegas billboards thanks to a funding effort led by the community that has raised more than USD 18,000 of its USD 25,000 funding goal so far. The marketing blitz, which also includes plane advertising, is targeting New York next.
While the AMC drama has some more time to play out, individual investors appear to have figured out a way to level the playing field with short-sellers that have been known to quash stocks down to being worth nothing. Whatever happens next with AMC’s stock, one thing is clear — individual investors have changed the game on Wall Street for institutions that once made all the rules.
For a look at all of today’s economic events, check out our economic calendar.