AP
- AMC Entertainment Holdings rose up to 310% on Wednesday.
- Day traders also fired GameStop shares, along with BlackBerry and Bed Bath & Beyond.
- Amateur investors are looking for quick profits from heavily shorted stocks.
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AMC Entertainment Holdings shares shot up 310% on Wednesday, with day traders accumulating heavily sold shares for the third consecutive day. The rise in shares added $ 7 billion to the market capitalization of the cinema chain.
Frantic purchases also increased GameStop’s stock by up to 157%, BlackBerry 24% and Bed Bath & Beyond 46%.
Amateur investors have come together, mainly on the Reddit r / wallstreetbets forum, to identify stocks they can buy in bulk with the hope of making quick profits. They often target stocks that sell quickly, as raising their stock prices can pressure short sellers to buy shares back to cover their positions, which raises prices further.
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Day traders also see strategy as a way to keep it on Wall Street. They target hedge funds, such as Melvin Capital, which had negative positions in 17 stocks listed in the United States at the last count. Four of them – GameStop, Bed Bath & Beyond, Dillard’s and Ligand Pharmaceuticals – jumped at least 10% on Wednesday.
The GameStop frenzy is especially divisive. Billionaire investor Chamath Palihapitiya bought bullish options on the video game retailer’s shares on Tuesday at the request of his Twitter followers, while Tesla CEO Elon Musk tweeted the word “GameStonk !!” with a link to the Wall Street Bets subreddit.
In contrast, Michael Burry of the famous “The Big Short” sent a quickly deleted tweet on Tuesday, condemning the frantic purchase of GameStop shares as “abnormal, insane and dangerous”. The investor, who probably made a fortune on GameStop, also called for legal and regulatory action against those involved.
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