Home / Business / AMC shares jump more than 20% as Reddit’s rally stretches for another week.

AMC shares jump more than 20% as Reddit’s rally stretches for another week.

The AMC movie theater is pictured in Times Square in the Manhattan borough of New York City, New York, on June 2, 2021.

Carlo Allegri | Reuters

AMC Entertainment, the meme stock that recently surprised Wall Street, jumped double digits on Monday. Due to speculation in the struggling movie theaters.

AMC shares jumped 23 percent to $57.71

a share in early trading Monday, after gaining 80 percent the previous week. The stock has toppled GameStop into a forum star. The famous WallStreetBets on Reddit, with retailers encouraging each other to combine stocks and call options.

Call options are tools that give investors the right to buy shares at a specified price within a specified time frame.

AMC gained more than 120% in June just one month after a 160% increase in May. Pushing the 2021 rally to more than 2600%, the stock has hit its January highs amid the GameStop trading frenzy, which hit an intraday record of $72.62 last week.

Other Meme shares also traded higher on Monday as Bed Bath & Beyond gained 7 percent, while BlackBerry jumped more than 8 percent. GameStop gained nearly 6%.

Amid fierce trading, TD Ameritrade said on Sunday it had increased margin requirements on AMC and GameStop to 100%, meaning investors would have to buy all securities in cash. The brokerage firm said it may apply additional requirements to open trading on AMC options that expire on Friday.

“#NakedShorts” and “#NakedShorting” trended Monday on Twitter and over the weekend. This means an increased short-term interest in AMC. Bare short is an illegal practice in short selling. whereby the short-term interest on the stock may be higher than the stock traded at times. Due to discrepancies between paper and electronic trading systems

AMC has about 18% of its floating stock sold short, compared with about 5% on average U.S. stocks, according to data from S3 Partners. Short seller S3 data with AMC suffered a $2 billion loss last week. last

“It is very tempting to short these stocks. But what if you don’t have a very liquid resource? Please try to resist the temptation as these prices may rise unexpectedly before falling to a reasonable valuation. And you might have to close at a high price point,” Interactive Brokers president Thomas Peterffy said Monday on CNBC’s “Squawk Box.”

“In the long run, stocks tend to approach their fundamentals. which in this case would be much lower,” added Peterffy.

AMC took advantage of last week’s massive rally, 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 25 million more shares.

— CNBC’s Kevin Stankiewicz contributed to the report.

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