AMC Entertainment Soars After CEO Details Plan to Cash In on Meme Stock Mania

Over a Year Since the Wall Street Bets Subreddit Introduced the Idea of Meme Stocks, the Trend is Still Going Strong, and AMC Entertainment Just Announced its New Strategy to Capitalize on It

Companies with diminishing fundamentals like GameStop (NYSE: GME) have managed to stay afloat thanks to massive support from retail investors.

Perhaps no company is leaning harder into meme stock mania than AMC Entertainment (NYSE: AMC). The movie theatre chain, along with the rest of its industry, was struggling to compete with streaming services even before COVID-19 reared its ugly head. When the pandemic hit, the company was on life support. Perhaps the only thing that kept the company from folding was the willingness of retail investors to prop up the company by buying shares.

AMC does not shy away from relying on retail investors’ support to keep the business running. Indeed, the company now considers garnering the support of retail investors a core competency of their business. The company proved this when it purchased 22% of Hycroft Mining (NASDAQ: HYMC), a gold mining company that has nothing to do with movie theatres but has been popular among meme stock investors; both AMC’s and Hycroft’s share prices rose dramatically after the deal was announced.

AMC CEO Adam Aron commented on the company’s announcement, stating:

“While the Hycroft investment is pretty far from home, it does rely on a core competency of our company to understand balance sheets, and raising cash, and solving liquidity problems.”

 Also Read: October’s Top 5 Reddit Meme Stocks

While the company has done an admirable job of managing the balance sheet and staying liquid, there is no doubt about what butters its bread.

In a recent interview with CNBC’s David Faber, Aron was asked:

“Is that the new core competence of AMC, to sort of use these memesters that you have to help turnaround the fortunes of a company because they’re willing to put money behind it?”

The AMC boss responded:

“I think I have to say the answer is yes, and we proved it.”

Shares of AMC are currently changing hands at $25.68 per share, down –12.8% on the day. YTD AMC stock is down -3.17%.

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Learn more about AMC Entertainment: Website | Investor Deck | AMC Chart

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