Reddit traders want “mother of all short squeezes”
AMC shares: New round in the battle between shortsellers and Reddit traders is on the way. (Photo: Shutterstock)
At the cinema operator AMC Entertainment, a new dispute between so-called Reddit traders and shortsellers seems to be sparking. The AMC share recently rose strongly.
In addition to the shares of the game retailer Gamestop, those of the US cinema chain AMC Entertainment have been in the focus of Reddit traders in recent months. So mostly young investors are named, some of whom organize themselves through the Reddit forum Wallstreetbets in order to sell shortsellers. AMC shares had shot up 1,300 percent since the beginning of the year, with shortsellers losing billions. Because a British hedge fund is said to have bet a lot of money on a decline in AMC’s stock, the Reddit traders seem to be getting back on track.
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Hedge Funds: “Convincing Short Opportunities”
According to the Financial Times, which cites a letter to investors, the London-based hedge fund Odey Asset Management is said to be betting on falling prices for AMC shares. The hedge fund managers see “some compelling short opportunities” in AMC, also triggered by the influence of private investors. Among other things, the Reddit traders have “led to major distortions” in the markets, according to Odeys. In addition, the corona crisis has made the cinema operator difficult. Odey has not yet commented on the media report.
A look at prices and trading volumes shows that the publication of the Investor: Inside letter opens up a new dispute between private investors: inside and short sellers. AMC shares are listed on the NYSE Thursday afternoon, New York time, up over ten percent. According to Handelsblatt 67 million shares were bought and sold on the New York Stock Exchange and the Nasdaq technology exchange alone in the first three hours of trading. This means that the volume in this period is above that of a full trading day at the beginning of the week.
Reddit traders want “mother of all short squeezes”
AMC Entertainment can look forward to a market capitalization of 16.5 billion US dollars. Since the previous all-time high of over $ 62 in early June, the value of the AMC share had recently halved to below $ 30. Now things are going uphill again. On Reddit, the first users are said to have already announced on Thursday that they would bring about the “mother of all short squeezes” in AMC shares. In this case, hedge funds would be forced to buy more shares at a higher price. That would give the course an extra boost.
