Shares of Reddit favorite AMC Entertainment Holdings (NYSE:AMC) continued a bounce from yesterday as the market session got underway Wednesday. That came from news of an executive promotion. The stock initially popped 8% this morning. But shares settled back down, as did those of other favorites among retail traders, including original meme stock GameStop (NYSE:GME) and a brand new addition to the S&P 500 index, Moderna (NASDAQ:MRNA). As of 12:15 p.m. EDT, shares of these names traded as follows:
- AMC was up 1.3%.
- GameStop was down 0.6%.
- Moderna was up 2.9%.
AMC has arguably overtaken GameStop as the most popular stock discussed on social media sites recently. The retail traders on Reddit's WallStreetBets forum have designated themselves "apes" -- a play on Planet of the Apes -- and AMC CEO Adam Aron is known as "the silverback." Aron has embraced the situation and the company has raised almost $3 billion selling new shares, and with additional borrowing, in the last year as the stock has soared with the backing of the social media movement.
Today, AMC announced Aron will add chairman of the board to his existing titles of CEO and president. Aron has engaged directly with the retail investors who he says now represent about 80% of the company's shareholders, and they cheered the news as the stock popped early this morning.
Biotechnology company Moderna is a new addition the S&P 500 index today, and it is now also receiving new interest on the WallStreetBets forum. The COVID-19 vaccine manufacturer is in the top five names of most mentioned stocks on the site, according to Benzinga.
Moderna will likely continue to trade based on its vaccine and other drugs, at least for now. It doesn't have the high short interest that has driven traders in other meme stocks to attempt to force a short squeeze. But it's worth noting that it is on the radar of Reddit users.
GameStop and AMC are established meme names, and both have benefited from spikes in their shares to help support struggling businesses. It's unlikely that AMC CEO Aron will change his strategy in his new role as chairman of the company's board. The business itself is beginning to recover, and he has directly addressed his social media followers saying that he respects their wishes. He recently tabled a proposal to sell an additional 25 million common shares hoping to further bolster the balance sheet, due to feedback and lack of support from the majority of shareholders.
Eventually the meme names should trade based on business fundamentals, like most stocks. But for now they continue to move on the whim of the retail trading crowd. That explains the up-and-down movements seen today as well.