What happened
Shares of AMC Entertainment (AMC 5.06%) are up 5.2% at 11:24 a.m. ET on Tuesday as the wild ride of meme stock volatility continued for yet another day.
AMC and GameStop both had trading in their shares briefly halted after the market opened under the New York Stock Exchange's Limit Up/Limit Down rule that prohibits activity in stocks that trade above or below established percentages. GameStop's shares are still down by 5% midday, but both had been initially sharply lower.
Image source: Getty Images.
So what
It had looked like AMC was going to be the victim of profit taking as its stock had started off down some 8.5% at the open. After shares had more than doubled over the past two weeks following the movie theater stock taking a 22% ownership stake in gold and silver miner Hycroft Mining, taking a breather would not be a surprise. AMC's shares surged 45% yesterday alone.
However, they immediately reversed course and began rallying higher once more.
Now what
What got investors supercharged over AMC stock yesterday was CEO Adam Aron telling Reuters he wanted to make more investments in financially distressed companies like Hycroft, using the experience it gained during the lockdown phase of the pandemic to assist other companies.
Whether subsequent deals receive a similar warm welcome remains to be seen, but AMC Entertainment seems to have all the fixings for initiating a short squeeze on its heavily shorted stock.
