The news at a glance
AMC: A popcorn movie at the stock market
So-called meme stocks are rallying again, and AMC is leaning into the frenzy, said Sarah Whitten in CNBC.com. “Analysts have been warning that the debtburdened theater chain could go bankrupt” even as it emerges from the pandemic. “Fans of the stock,” who call themselves apes (after the “apes strong together” line in Rise of the Planet of the Apes), have organized on social media forums like Reddit to drive up the price of shares. That has pushed shares up 1,400 percent this year. AMC’s CEO, Adam Aron, has embraced the retail crowd, offering popcorn to shareholders. And he’s leveraged the interest to raise money with a $230.5 million stock sale last week.
“An ability to corral neophyte investors has become an essential skill in the meme-stock era,” said Chris Bryant in Bloomberg. com, and Aron has proven to be an expert at charming the speculators. He has followed Elon Musk’s model, posting apethemed memes to Twitter and donating $100,000 to a gorillaprotection charity. But the company still carries more than $5 billion in debt, and the long-term future of cinemas remains dim. The business realities, though, might hardly matter. Hitching the “company’s fate to the whims of the Reddit crowd” has kept AMC afloat. What happens when the stock loses momentum and the day traders lose interest?