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AMC Entertainment soars again as Reddit raiders squeeze short sellers

AMC Entertainment Holdings Inc (NYSE:AMC), the owner of the UK’s Odeon cinema chain, saw its shares surging once again on Friday morning on Wall Street as Reddit traders from r/wallstreetbets returned once again to put the squeeze on short-sellers.

In mid-morning trading, the movie theatre group was up 21.4% at US$32.41 following a similarly strong performance on Thursday and in pre-market dealings.

READ: Odeon confirms 17 May reopening of vast majority of cinemas

AMC was one of the beneficiaries of a surge in the share price of several companies earlier this year, most notably GameStop Corp (NYSE:GME), as a community of retail traders headed by r/wallstreetbets began piling into the stock in a bid to inflict massive losses on short sellers.

This latest frenzy appears to have triggered by the return of short sellers to AMC shares, with reports emerging earlier this week that the percentage of the stock being shorted had reached all-time highs, effectively serving as blood in the water for the retail trading mob.

AMC was also being talked up on Thursday by members of the wallstreetbets forum, many of whom were encouraging existing holders of the stock not to sell in an effort to send the shares ‘to the moon’, common parlance for large surges in value that characterised the first wave of stock market frenzies earlier this year.

Aside from its memestock reputation and retail following, AMC’s fortunes are also likely to have been lifted by the relaxation of pandemic restrictions in its markets, which is likely to see a boom in cinema demand after a long period of lockdown. The growth in value is also something of a Lazarus moment for the company, which only just avoided bankruptcy earlier this year as pandemic costs and closures ate away at its balance sheet.

The recent surge also means AMC’s shares are up 1,512% in the year to date and within striking distance of the stocks all-time high of around US$35.68 reached in March 2015.

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