AMC Entertainment staged a reversal on Thursday afternoon after a sharp decline earlier in the day.
AMC Entertainment staged a reversal on Thursday afternoon after a sharp decline earlier in the day. The meme stock had initially sold off after the company filed to sell 11.5 million shares of its stock. The company also warned investors in the filing the current stock price is “unrelated to [its] underlying business.” Five experts weigh in on what’s driving the stock’s market action. Gunjan Banerji, markets reporter at The Wall Street Journal, has seen exponential interest in options trading in the wake of the GameStop and AMC surge. “The options activity is a key, key ingredient here. I’ve been following this market for a few years, and I’ve never seen this much interest in options trading. Options activity on AMC hit a record high yesterday, so that’s above the levels that we saw earlier in the year when the GameStop frenzy was first starting, and it shows you how this movement has grown and people are looking to lottery-ticket bets on AMC. They’re trying to double, triple, maybe even quadruple their money within days and even hours through these call options.” Amy Lynch, founder of FrontLine Compliance, is impressed by the language used on AMC’s behalf to warn investors. “One thing I can say that they did that was really smart was when they put out their 8K… they were disclosing to investors that this is a high-risk investment — they could lose all of their money, they should not be investing or buying these shares because of the volatility.
