Shares of AMC Entertainment were halted Thursday morning after the movie theater chain plunged as much as 33 percent and as the stock — powered by retail investors and whipped up on online forums — enters a new phase of the meme stock frenzy.
Retail investors — many of whom are active on Reddit’s WallStreetBets forum — helped propel AMC, which shot up 95 percent Wednesday to an all-time high of $62.55. It’s reminiscent of the trading mania that swept through the markets earlier this year alongside GameStop and other companies that institutional investors had bet against.
Despite the dip, AMC has seen its shares soar more than 2,000% this year after amateur investors who congregate on social media piled into the money-losing company’s stock and that of other beaten-down companies now known as meme stocks, including GameStop, Bed Bath & Beyond, Blackberry and Koss.
AMC acknowledged that phenomenon Thursday in a filing with the Securities and Exchange Commission when it announced the potential sale of shares “from time to time.”
“We believe that the recent volatility and our current market prices reflect market and trading dynamics unrelated to our underlying business, or macro or industry fundamentals, and we do not know how long these dynamics will last,” AMC said in the filing. “Under the circumstances, we caution you against investing in our Class A common stock, unless you are prepared to incur the risk of losing all or a substantial portion of your investment.”