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AMC stock trading was suspended on Wednesday after the company promised to provide investors with free popcorn, and the stock price soared. This is the latest example of how the “memetic trading” frenzy has swept Wall Street.
The group’s share price soared by 93% to $61.82 per share on Wednesday, and then fell back, resulting in two suspensions of trading on the New York Stock Exchange. In the past month, the stock has risen more than 450%.
Other “memetic stocks” such as Bed Bath & Beyond and BlackBerry also rose sharply on Wednesday.
According to Bloomberg data tracking companies with a market value of more than $500 million, AMC was the most actively traded stock on US exchanges on Wednesday, while BlackBerry was the third most actively traded stock.
AMC’s new investor connection program will also provide benefits such as “special screening” invitations, highlighting how the rising power of individual traders can attract the attention of listed companies and professionals Wall Street Investor.
Driven by the message boards on the social media platform Reddit (such as r/WallStreetBets), when retail traders’ trading volume surged to record highs in the first two months of this year, Meme stock became the focus of attention
Data from Piper Sandler shows that since the outbreak of the pandemic, retail investors have joined the market in record numbers. Between 2019 and 2021, retail trading volumes have doubled, increasing from less than 10% to more than 20%.
AMC has always been one of the main beneficiaries. Amateur traders now constitute a key group of AMC’s overall shareholder base, owning approximately 80% of the company’s shares. AMC said on Wednesday that by March 2021, more than 3.2 million new individual investors will hold shares in the company.
Big investors also brave the wind and waves. On Tuesday, AMC stated that it had sold 8.5 million new shares to hedge fund Mudrick Capital Management at a price of approximately US$27 per share—a significant premium over AMC’s share price of US$2 at the end of last year. A few hours later, after fundraising news raised the stock to as high as $33.53, Mudric sold the stock.
Other US listed companies are also thinking about how to best engage with the new generation of retail shareholders and their growing power in the market. During the pandemic, shareholder meetings and other shareholder participation activities are carried out online, making daily investor participation and voting easier.
Lumi, the operator of the general meeting, said it has noticed a significant increase in the participation of retail shareholders, including attending general meetings, asking questions and participating in voting. Easy-to-use brokerage platforms such as Robinhood amplify this by emailing shareholders to inform them of voting deadlines.
“The company tells us that the number of people attending meetings is different. This is not a crowd drinking tea and biscuits,” said Richard Taylor, Lumi’s CEO. “Once you remove the barriers to who can get there, the demographic structure of who can participate and ask questions will change.”
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