AMC shares quadruple as retail traders raid hedge fund short targets

Shares of embattled movie theater giant AMC Entertainment more than quadrupled at the opening bell on Wednesday amid a flurry of trading activity in some of Wall Street’s most shorted stocks. About ten minutes into the session the stock was halted for the first time due to volatility. Shares were halted several additional times during the first hour of trading amid heavy activity in the stock.

The stock last traded 250% higher. Earlier, it jumped as much as 310% just after stocks opened for trading. During premarket trading shares had been up as much as 360%.

Roughly one hour into trading more than 500 million shares had already changed hands — significantly above the stock’s 30-day average volume of 86.8 million shares.

Individual investors are creating short squeezes by piling into these names, while hedge funds who are short on the other side rush to cover their losses. They are promoting their activity on the wallstreetbets Reddit board, which has 2.8 million members. AMC appeared to be a growing topic of interest on the board.

The influence of retail investors — most apparent in GameStop — has captivated the Street in recent days, and speaks to a new class of traders who grew up amid the pandemic. GameStop more than doubled on Wednesday, rising 110%.

«The spotlight has pivoted from Large Cap Tech/’Retail Favorites’, to a largely ignored corner of heavily shorted smaller cap stocks,» Barclays said Tuesday in a note to clients. «In a span of a month, retail trading has significantly impacted price action and sentiment in these heavily shorted names, cementing the dominance of retail option investors.»

AMC currently has 24% of its float tied up in short interest. Meanwhile GameStop’s short interest stands at 138%, according to FactSet.