Retail investors led by Reddit forum WallStreetBets continue to drive up the price of movie chain AMC Entertainment, with the stock tacking on another 19% today. Investors are so committed to the company that they are talking about going back to the movies and splurging for popcorn when AMC shares hit USD 30. They just might get their wish.
Slot Machine Gains
Investors are comparing AMC to “sitting at a slot machine in Vegas,” and by the looks of it they are not too far off. They are continuing to buy even as the price continues to rise while setting their sights on lambos and holding on for dear life. It is a perfect storm of sorts where hedge funds are buying AMC shares to cover their short positions and institutional investors are reporting jumping on the bandwagon to ride the wave.
Meanwhile, short seller losses are mounting, reaching USD 1.8 billion in recent days across GameStop, AMC and Virgin Galactic, according to CNBC. So far this year, USD 6.7 billion has been wiped away from short-sellers in GameStop.
Not the Only Short Game in Town
While AMC and GameStop are two of the most popular stocks on the radar of WallStreetBets, they are not the only short game in town. Another post on the WallStreetBets forum is shining the spotlight on UWM Holdings, the parent company of United Wholesale Mortgage. The stock is up nearly 4% today and according to the Redditors there are some catalysts floating around.
Short interest in UWMC is said to be 22%, which incidentally is higher than that of AMC and Gamestop, at 21% and 17%, respectively. In addition, the company announced in its Q1 earnings report that it is repurchasing as much as USD 300 million in shares in the next two years, starting this month. Today the stock was in the pipeline to be added to the MSCI Global Small Cap Index. With a market cap of USD 14 billion, Wall Street Bets suggested that it could make its way to the index’s top 10 rankings.
Meanwhile, the meme stocks are also on the radar of Bank of America analysts, who believe the Reddit trend could be here to stay thanks to the rise of zero-commission trading platforms, more idle time and higher balances in savings accounts.
For a look at all of today’s economic events, check out our economic calendar.