Look, when the internet learns a new trick — like it did in January, with GameStop — it’s a pretty safe bet that people will play the trick again. So AMC is through the roof right now: it touched $72.62, a 91 percent increase from its open and an all-time high. That’s because AMC has embraced the trolls, and now the stock price is going brrr.
AMC announced today that it was creating AMC Investor Connect, “an innovative, proactive communication initiative that will put AMC in direct communication with its extraordinary base of enthusiastic and passionate individual shareholders to keep them up to date about important company information and to provide them with special offers.” This represents “a groundbreaking new approach” to communicating with retail investors, the company says. It’s a shame they didn’t put a bunch of rocket emojis in the announcement — after all, there’s no need to be coy. We all know exactly who AMC is speaking to, and if they sign up today, they’re getting free popcorn. I can’t make this shit up.
This is also, essentially, the opposite of what GameStop did, which was say absolutely nothing. You got the sense that maybe the exec team was nervous that anything they said might potentially be securities fraud. AMC, though, they’ve elected to really embrace the whole meme thing. I’m hoping there are more announcements where they get meme-ier. Like, retail investors get a free Lego rocket in the fourth quarter or something.
The apes of r/WallStreetBets have been good to AMC. The in-person theater company had been suffering due to the coronavirus — but the r/WallStreetBets excitement in January essentially wiped out $600 million of debt by letting the holders convert them into stock. Meme enthusiasm essentially saved the company. (AMC also issued new stock because why not. “Apes together strong,” as they say at WallStreetBets!)
A lot of the meme stocks are shooting up again. CNBC even has a “meme stock” graphic now.
Meme trading didn’t originate with stocks — it’s a strategy jump. You know what trades heavily on memes? Cryptocurrency! (You remember “HODL,” right?) And you know what makes you go lol nothing matters money is made up? Also cryptocurrency!
It was probably inevitable that traders would bring cryptocurrency’s nihilistic insights to the broader market. This real question is what the finance normals plan to do about it. Like, you can make cute little risk models and fill out your Excel spreadsheets, but how do you take into account the possibility that a roving band of irony-poisoned redditors can blow you up at any minute?
You could say, “Hey, this is bull-market exuberance.” You could also say, “Hey, interest rates are effectively zero right now so there’s a lot of money sloshing around.” Those things are true and they help. But what the internet learned in January is that it can meme stocks into going up, and some people will make money when that happens, and there’s nothing anyone can do to stop it. It may not even be fraud because no one is lying. This started somewhere, and that somewhere was cryptocurrency. Of course, when you bring this strategy to the broader market, you can also potentially fuck over a bunch of big, serious companies, which makes the trolling even more fun.
Anyway, I hope the AMC investors enjoy their popcorn.