What happened
The dynamic duo of meme stocks are at it again today as shares of AMC Entertainment (AMC 9.56%) and GameStop (GME -0.68%) are moving once more in tandem this morning.
The movie theater operator is carrying meme stocks higher with its shares trading up 8.3% at 10:37 a.m. ET on Thursday, while the video game retailer is up a more modest 1.1%. Even Bed Bath & Beyond (BBBY) is joining in the rally, with its shares rising 7.2% this morning.
So what
Meme stocks had fallen out of favor for a while, but in recent weeks traders have awoken to their volatile issues once more, especially after AMC announced it was creating a preferred share of stock that would be issued to investors on a one-for-one basis based on the number of shares of common stock they own.
Over just the past week, AMC is up 30% and is more than 50% higher from where it stood a month ago. Although GameStop has often risen in tandem with AMC, the moves have not been nearly as large, as its shares are up 7% and 18%, respectively.
Home goods retailer Bed Bath & Beyond, on the other hand, has been on fire all by itself, with its shares respectively 73% and 109% higher.
Now what
As all of the meme stocks remain heavily shorted, bulls -- or as AMC investors refer to themselves, apes -- are trying to rally the stock to effect a short squeeze, or force the short-sellers to cover their positions.
Although these investors feel there are market players conspiring against them, something AMC CEO Adam Aron has said he's found no evidence of, they believe the new preferred stock AMC issued could certainly cause the tumult they've been waiting for.
Aron himself says it's part of the motivation in issuing the shares (the primary reason is he wants to raise more money), as the preferred stock will serve as the vehicle to count the shares outstanding. It could prove once and for all whether there are truly more shares in play than have been issued.
