{"id":262619,"date":"2021-05-30T05:15:01","date_gmt":"2021-05-30T02:15:01","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/meme-mob-behind-gamestop-frenzy-may-imperil-soaring-amc\/"},"modified":"2021-05-30T05:15:01","modified_gmt":"2021-05-30T02:15:01","slug":"meme-mob-behind-gamestop-frenzy-may-imperil-soaring-amc","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/meme-mob-behind-gamestop-frenzy-may-imperil-soaring-amc\/","title":{"rendered":"#\u2018Meme\u2019 mob behind Gamestop frenzy may imperil soaring AMC"},"content":{"rendered":"

“#\u2018Meme\u2019 mob behind Game<\/a>stop frenzy may imperil soaring AMC<\/strong>”<\/p>\n

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Adam Aron says he wants to \u00adincrease his Twitter<\/a> following to include about 1,000 more professed small-investor shareholders of the company he runs, AMC Entertainment.\u00a0<\/p>\n

His goal is to better \u201cunderstand this phenomenon that has changed who owns AMC.\u201d But based on the type of AMC shareholder who hangs out on Twitter, he may be surprised \u2014 and more than a little \u00adembarrassed \u2014 by what he finds.<\/p>\n

AMC, of course, is the world\u2019s largest movie-chain business, synonymous for many years with blockbuster movies<\/a>, sticky floors and terribly overpriced popcorn.<\/p>\n

But Aron\u2019s and AMC\u2019s problems don\u2019t end there. Pre-COVID, it was streaming that offered a cheaper alternative than going to the movies. During COVID, it was forced government closures of many AMC theaters.\u00a0<\/p>\n

Post-COVID, his worries are still streaming \u2014 just more pronounced. Streaming movies has been ingrained into the mainstream and the theatrical window has shortened. Plus, even the vaccinated may not want to be crammed into a movie theater and risk a breakthrough infection.<\/p>\n

Add one more worry to the mix: An investor base composed of some of the least sophisticated, financially incurious and nasty people out there. In the past, AMC was like most companies, with large institutions \u2014 money managers and pension funds \u2014 being its biggest shareholders.<\/p>\n

No longer. The big guys ran for cover because they think a theater chain is a lousy long-term business. Filling their void over the past year was some 3 million individuals who now control anywhere from 70 to 80 percent of outstanding shares.<\/p>\n

The reason: AMC is one of those so-called meme stocks small investors piled into earlier in the year just because, you know, they could. They\u2019re called meme stocks because for the most part there\u2019s really nothing fundamental driving this investor obsession other than a \u00addesire to wreak havoc and attack those who dare mention that AMC is losing money.<\/p>\n

\"While
AMC chief Adam Aron wants to better \u201cunderstand this phenomenon that has changed who owns AMC.\u201d <\/figcaption>
Getty Images for American Cinematheque<\/span><\/figcaption><\/figure>\n

The people piling into stocks like AMC and another meme stock, GameStop \u2014 a video-game retailer mostly found in malls \u2014 refer to themselves on Twitter as \u201cGorillas\u201d and \u201cApes\u201d and they find it thrilling to band together and drive up stocks that Big Wall Street has abandoned. Based on some of my reporting on these folks, they\u2019ve found a sense of community and, in some cases, the lure of a cult in doing so.<\/p>\n

To some of the cult members, it\u2019s a modern day David-vs.-Goliath scenario that\u2019s producing biblical results. David had a slingshot. These folks are armed with their no-trading-fee Robinhood app<\/a>s, endless stimmie checks and nothing better to do than scour investment message boards for ways to disrupt the markets.<\/p>\n

After a hiatus, meme-stock mania is back. Over the past five days, shares of AMC, for instance, have soared 116 percent even with Friday\u2019s dip. The company\u2019s market cap is nearly $12 billion \u2014 several times as high as it was pre-pandemic when the company wasn\u2019t losing money, and far more than when it was a penny stock last year seemingly headed for Chapter 11.<\/p>\n

Hopefully, as he gets to know his shareholders, Aron will learn what I\u2019m describing here: that a large part of the motivation to keep buying his stock isn\u2019t their love of the movie business.<\/p>\n

It\u2019s to join a cult of investors spreading the word on financial message board Reddit that they should join a movement that puts making money secondary. It\u2019s mostly dedicated to sticking it to \u201cthe man\u201d \u2014 namely hedge funds who were shorting shares of AMC and would make money if the stock continued to fall (and losing a ton now as the stock keeps surging).<\/p>\n

For them it\u2019s fun watching this \u201cshort squeeze\u201d play out. The meme buyers made big headlines earlier in the year when one hedge fund shorting memes nearly went out of business.<\/p>\n

Making less news<\/a> back in January was that some of the Davids also got crushed when AMC and GameStop fell off their highs. Unlike the hedge funds, these investors weren\u2019t multi\u00adbillionaires with access to new capital. The losses hurt.<\/p>\n

Now the meme short-squeezers are back on AMC. Message boards and Twitter are lighting up with calls to buy the stock. AMC jumped from $12 to above $26 last week, and judging by message-board activity, there isn\u2019t much desire for the \u00adDavids to sell anytime soon as they sense yet another opportunity to stick it to \u201cthe man.\u201d<\/p>\n

Unfortunately, that philosophy also leads some of these Internet \u00adinvestors to mock, harass and insult anyone who questions their activities with trolling not suitable to describe in a family newspaper.\u00a0<\/p>\n

I have spoken to Aron about the dark side of his investor base, and I believe it when he says that, while he \u201cwholly embraces\u201d his new shareholders, he doesn\u2019t condone any of the trolling behavior. I also think it\u2019s a good idea for him to get to know them. Aron is saying that he already follows on Twitter 1,000 people who say they are AMC investors and many of them are decent people trying to make money in the markets.<\/p>\n

\u201cThe goal is not to fan their flames,\u201d Aron says.<\/p>\n

But it would be nice if he understands the motives of many of these folks. Running around and colluding with other investors simply to cause a short squeeze comes dangerously close to market manipulation.\u00a0<\/p>\n

If SEC Chairman Gary Gensler wasn\u2019t so obsessed with turning corporate-woke, he would look into what\u2019s happening with the manipulation of the meme stocks. In the meantime, good luck to Aron in getting to know his owners. The next shareholder meeting should be a doozy.\n <\/p><\/div>\n

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Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

“#\u2018Meme\u2019 mob behind Gamestop frenzy may imperil soaring AMC” Adam Aron says he wants to \u00adincrease his Twitter following to include about 1,000 more professed small-investor shareholders of the company he runs, AMC Entertainment.\u00a0 His goal is to better \u201cunderstand this phenomenon that has changed who owns AMC.\u201d But based on the type of AMC…<\/p>\n","protected":false},"author":1,"featured_media":262620,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2021\/05\/AMCboard.jpg?quality=90&strip=all&w=1200","fifu_image_alt":"","footnotes":""},"categories":[70897],"tags":[107734,50568,4977,73689,1545,72128,71070,72667,4979,5005,88271,70359],"class_list":["post-262619","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-5-29-21","tag-adam-aron","tag-amc","tag-amc-entertainment","tag-coronavirus","tag-gamestop","tag-hedge-funds","tag-investors","tag-movie-theaters","tag-reddit","tag-shareholders","tag-stocks"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/262619","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=262619"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/262619\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/262620"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=262619"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=262619"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=262619"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}