News & Analysis

It's a showstopper! Massive 95% stock price rise caused by social media

Andrew Saks, Monday, 7 June 2021

I miss going to the theater. It is one of the many great cultural mainstays that made me choose London as my home, yet it was brutally stopped in its tracks in March 2020 by the government, meaning that even those who avoided any lockdown-related coercion weren't able to continue to feed their appetite for artistic appreciation.

The doors were closed, and the performing arts sector's existence threatened.

The same applied in many other major metropolitan cities in which theater plays an important role in cultural life, with notable cities being New York where Broadway was rather narrow, and in Los Angeles where the producers came up with the material but were unable to put it into choreographed reality.

It is perhaps odd, in that case, that AMC Entertainment, a New York Stock Exchange-listed theater production company of sizeable proportions has had a massive spike in its share price.

Last week, its stock rose from a paltry $10 per share to an astonishing $62 per share before settling at $47.91 on Friday at close of business.

Did it rise? Oh no it didn't... Oh yes it did....

Very drole, you may say, however it was no pantomime, and it was curtains for the market makers and the exchanges. This time, the massive rise in price happened at the hands of the absolute opposite of the extrovert performance artists.

This massive rise in price was caused by the same group that created the massive market movements in January which related to GameStop stock, giving rise to incredible fluctuations that has now become known as the ‘meme stock flash crash’.

The Reddit subgroup forum members have been at it again.

Keyboard warriors and theatrical artists may have little in common, but this time, Reddit's WallStreetBets forum members have been concentrating on AMC Entertainment to the point at which share prices rose by 95.6% to $62 per share after the company announced it would launch an exclusive web platform for retail investors.

Shareholders in AMC Entertainment would receive many perks under this new web platform, including free popcorn, exclusive new screenings, and the chance to speak with CEO Adam Aron.

This massive rise in share price not only represents an all-time high for AMC Entertainment stock, but is one of the highest ever sudden rises in price for an entertainment firm in history.

Some analysts in the mainstream news are saying that stock has decreased in value today, but that really is very much wide of the point. The prices are still at a massive high, resting at $43.74 currently.

Is this a showstopper, or will the Reddit forum members keep AMC Entertainment in the limelight?

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