NEW YORK (BLOOMBERG) – AMC Entertainment Holdings’ cult-like status among social media retail investors saw its shares vault into the ranks of some of the world’s most valuable companies.
The company has gone from a small cap to a large cap in the space of a few months. A 95 per cent gain amid a retail trading frenzy for so-called “meme” stocks on Wednesday (June 2) left the movie theatre chain with a market capitalisation of US$31.3 billion (S$41.4 billion). That makes it more valuable than half of the companies in the S&P 500 Index.
AMC is now worth more than Tyson Foods and Delta Air Lines despite projections for the company to bring in a fraction of their revenues.
In the throes of the Covid-19 crisis that shuttered movie theatres across the world, AMC’s market value hovered under US$500 million for much of last year. Infatuation with the stock among a horde of retail traders began to turn the company’s fortunes this year, a following its chief executive has embraced.
The mania is similar to that seen early in the year, when GameStop shares surged 1,642 per cent over 11 sessions. AMC’s market value of US$31 billion on Wednesday surpassed the video game retailer’s US$21 billion.
AMC capitalised on its recent gains by raising US$230 million directly from creditor Mudrick Capital Management earlier this week.
On Wednesday, AMC added even more fuel to its rally when it said it would reward its retail investors with special screenings and free popcorn.