Shares of beleaguered movie theater chain AMC Entertainment soared on Wednesday, driven by a frenzied rescue effort by users on Reddit, TikTok and other social media platforms to buy the stock.
AMC shares were up nearly 300% as the market opened Wednesday, with shares trading at $20.31 per share. That’s the highest the stock has traded since September 2018.
AMC’s surging stock price stems from the online community on Reddit r/Wallstreetbets, where users share stock tips and option trading. The hashtag “#SaveAMC” was the top trending topic on Twitter and other social media platforms early Wednesday. The Reddit board, which has 2.8 million members, has also been promoting video-game retailer GameStop, causing the stock to more than quadruple in January for no apparent reason.
Reddit co-founder Alexis Ohanian took to Twitter on Wednesday to describe the phenomenon as ” the public doing what they feel has been done to them by institutions.”
“This is an echo of what we’ve seen social media enable the public to challenge institutions for the last decade,” Ohanian wrote. “And it’s a perfect storm at a time when lots of people are hurting, interest rates are so low, inescapable student loan debts loom, and every major institution has caught Ls during a /global pandemic/ over the last year. This is something to believe in.”
Earlier this week, AMC announced it secured $917 million in financing, enough to get the struggling cinema chain through the pandemic. “Imminent bankruptcy is completely off the table,” AMC’s CEO Adam Aron told Variety. “We believe we have the runway we need to get through this pandemic.”