Reddit traders and other retail investors have pushed the stock of theatre chain AMC Entertainment up as high as 3,200 percent this year alone.
On Wednesday, AMC launched Investor Connect, an initiative that promises to engage shareholders who register with updates and special offers such as popcorn and special screening invites. Indeed, it appears that non-institutional investors now own a super-majority of AMC shares. In a press release announcing the initiative, AMC CEO Adam Aron said that retail investors “owned more than 80% of AMC at last count.”
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AMC stock surged after the announcement, doubling in value even as hedge funds and short sellers rang the alarm about the stock’s overvaluation.
Previously, it took the entire month of May for the stock to double in value, recording just over 1,400 percent growth. Mudrick Capital, which had previously purchased $230 million worth of shares in an equity sale that one analyst told Bloomberg was “pivotal to the survival of AMC over the past year,” warned that the stock was overvalued and on Tuesday revealed it sold its entire stake for an undisclosed profit. Just a few months before, Mudrick made tens of millions of dollars on buying AMC bonds and options.
Even so, AMC’s stock is doing well for now even without these kinds of institutional heavy hitters. “We intend to communicate often with these investors, and from time to time provide them with special benefits at our theatres,” said Aron. “We start with a free large popcorn on us, when they attend their first movie at an AMC theatre this summer.”
This isn’t the first time Aron has appeared to court online retail traders. On the company’s second quarter earnings call, the chief executive mentioned the 1988 film Gorillas in the Mist, which r/WallStreetBets read as a cryptic message given their habit of referring to themselves as “apes.” Aron also promised to donate $50,000 to the Dian Fossey Gorilla Fund through AMC and another $50,000 personally; the WallStreetbets subreddit has at least $350,000 for the fund and has been thanked by its director.
“These individual investors likely own a majority of our shares, they own AMC. We work for them. I work for them,” Aron said on the earnings call. “By definition, their interests and passions are important to AMC, their ambitions and passions are important to me.”
