What happened
Easy come, easy go. The gains AMC Entertainment (AMC -1.37%) made after buying into a gold and silver miner and then saying it wants to make other outside-the-box investments have all but evaporated.
Shares of the movie theater chain are trading 2.4% lower at 10:56 a.m. ET on Friday on no news specific to the company other than the air continuing to leak out of its overinflated balloon.
Image source: Getty Images.
So what
After a year of mostly trending lower, AMC's stock woke up and rocketed higher, more than doubling in value in two weeks' time as CEO Adam Aron revealed the theater operator took a 22% stake in nearly defunct Hycroft Mining and said the $1.8 billion in liquidity that was burning a hole in his pocket could be put to good use buying other, similarly situated companies.
The meme stock crowd that has been critical to keeping AMC's stock afloat rallied around its shares once again, taking them from a low of $13.56 a share on March 14 to a high of $34.33 on March 29. But taking profits on that rally was much too much for many, and shares have sold off since.
They closed yesterday at $19.73 per share and in morning trading today were around $19.20 per share. The latest price does represent something of a mini rally as they had been below $18.50 per share earlier.
Now what
Because AMC and its meme stock brethren don't trade on the merits of their business but on internet chat room and social media mentions, shares are going to be volatile.
The loss of value since the run-up, though, suggests Aron and AMC may need to come up with a plan to bolster the movie theater business rather than willy-nilly buying bunches of disparate businesses.
