The Rebellion Goes Beyond GameStop
AMC shares have soared as much as 420% this Wednesday, as tight supply failed to satisfy demand from the most rebellious operators for the third day in a row. The rally in its titles added up to 7,000 million dollars to the market capitalization of the chain of cinemas.
This company announced earlier this week a financing agreement of 917 million dollars to avoid filing for bankruptcy. But the enthusiasm of amateur investors for this company allowed AMC to sell shares for millions of dollars last year, in the heat of lockdowns and the pandemic.
The shopping euphoria also rubbed off on BlackBerry shares, which rose 31% and Bed Bath & Beyond, up another 46%. Along with GameStop, which was trading up another 146%, the four companies have gained a combined market capitalization of $ 29 billion during their trading peak.
As CNBC notes, the parabolic rise in GameStop shares in the past two weeks, fueled in part by a forum on Reddit, has generated more than $ 2 billion for the company’s three largest individual shareholders. The situation has reached such a point that the TD Ameritrade platform has decided to restrict its clients from trading GameStop, AMC and other shares in order to “mitigate the risk to our company and our clients.” A decision that is made “as a precaution amid unprecedented market conditions and other factors.”
Investors on the Reddit r / wallstreetbets forum, primarily made up of young people recently fond of investing via commission-free platforms like Robinhood, have long been searching for stocks they can buy en masse in hopes of making quick profits.
They often focus on stocks that are popular for their short position, as raising the price of these stocks can pressure short-sellers, typically hedge funds, to buy stocks to hedge their positions, which makes prices go up even higher.
Chinese electric vehicle maker NIO has also received investor interest on platforms such as Discord and Reddit, causing its US-listed shares to rise more than 1,150% in the past 12 months. NIO is now among the top five automakers in the world, with a market capitalization of about $ 96 billion. The company delivered 43,728 vehicles in total last year.
Other names buzzing among these platforms include data analytics company Palantir Technologies, whose stocks have soared more than 270% since it went public in September, and hydrogen battery maker Plug Power, which has up more than 750% in the last six months.
The Rebellion Goes Beyond GameStop - /10