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    Cinema chain AMC Entertainment becomes the new king of meme stocks; gains 2,900% this year: Report

    Cinema chain AMC Entertainment becomes the new king of meme stocks; gains 2,900% this year: Report

    Cinema chain AMC Entertainment becomes the new king of meme stocks; gains 2,900% this year: Report
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    By CNBCTV18.com  IST (Published)

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    AMC Entertainment Holdings Inc. has now become the new king of so-called meme stocks as the shares of the cinema theatre chain surged 2,900 percent so far this year.

    AMC Entertainment Holdings Inc. has now become the new king of so-called meme stocks as the shares of the cinema theatre chain surged 2,900 percent so far this year.
    Shares of the cinema chain nearly doubled on Wednesday -- adding to Tuesday’s 23 percent gain -- after it announced a program called AMC Investor Connect that will reward small-time investors with goodies such as special screenings and free popcorn, a Bloomberg report said
    The Reddit-fuelled rally led the retail traders to ignore the company’s financial troubles as they continued to buy heavily shorted stocks.
    This 390 percent surge in stock prices over the past fortnight has pushed AMC’s stock to a record high. This has subsequently led its market capitalisation to a whopping $31 billion, overtaking other meme stocks like GameStop Corp which currently stands at $21 billion post reaching a record high of $25 billion earlier this year, the report added.
    The program, initially launched at theatres in the United States only, will benefit any shareholder who signs up. Investors who sign up for AMC Investor Connect will receive an initial offer of a free large popcorn when attending a movie at AMC this summer, with more benefits like special offers and company updates later.
    As of March 11, 2021, AMC has over 3.2 million individual investors who own a stake in the company.
    A meme stock is a stock that has seen an increase in volume not because of the company's performance, but rather because of hype on social media and online forums like Reddit.
    AMC’s financial performance is weak and with the movie chain still reeling from the pandemic, analysts have steadily cut its earnings estimates. Analysts also expect the company to lose nearly $100 million on that basis over the next 12 months.
    A high debt burden has further dampened the company’s fundamentals. The company’s long-term debt pile has nearly tripled from under $2 billion in 2016 to $5.4 billion as of the first quarter of this year.
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