Even the $32 level is about three times the value of the company a month ago. The company has become the latest target in the struggle between retail traders and Wall Street investors, known as short sellers, who make money when stocks fall.

In recent weeks, retail investors on Reddit, Discord, and other social media networks have been buying the theater chain in large numbers, buying as many shares as possible, even though the company’s underlying business is still negatively affected by COVID-19.

Business is not booming

AMC has 585 cinemas in the United States and 97 cinemas in Canada and around the world. The vast majority of the chain’s stores have either closed or reduced production capacity. Last month, AMC revealed that it had lost US$567 million in the first three months of the fiscal year.

Compared with the same period before the pandemic, the number of paying customers dropped by 88%. But this has not stopped retail investors from injecting capital into chain stores because they believe a better era is coming. The stock has risen by more than 1,100% this year.

Many Wall Street short sellers have been betting that the company’s stock price will fall, but when the momentum changes direction, these shorts are forced to buy the rising stock price, creating greater buying pressure to push up the stock price. This phenomenon is called For short squeeze.

Watch | This short video explains how short selling works:

One of the most memorable short-term squeezes that occurred at video game retailer GameStop earlier this year, and now AMC has adopted the same ingredients.

Although the stock price fell slightly in the afternoon to $70 per share, the value of AMC is more than $25 billion, which exceeds the value of GameStop at the height of its frenzy. At present, more than 3 million people own AMC shares, and their shares together account for more than 80% of the company’s shares-for any listed company, this proportion is very high. For example, in the rival movie chain Cinemark, retail investors own less than 10% of the company, pointed out Bloomberg Intelligence analyst Geetha Ranganathan.

She calculated that about 20% of AMC’s stock, or about 95 million shares, were sold short. So far this year, short sellers have lost more than $2 billion when betting on the company. According to short selling research firm S3 Partners.

She said that the company’s stock price’s rise was “mainly due to individual investors’ desire to squeeze short sellers and hedge funds to transform Wall Street,” because fundamental problems with the company’s core business model still exist.

“Cinema closures, capacity restrictions and film delays mean that revenues may not reach pre-pandemic levels in the foreseeable future,” she said, “and the long-term box office outlook remains weak as studios shrink theater windows and send movies directly To their streaming platform.”

Chain stores provide shareholders with free popcorn

In any case, AMC management is gradually being welcomed by retail investors, and this week it raised $230 million in cash through the sale of new shares that were eagerly swallowed up by the market.

The company launched a program that sounds like a loyalty program for its investors on Wednesday, and announced plans to provide investors with benefits when they visit theaters-including watching their first face-to-face show this summer. Get big popcorn for free during the movie.

“Even though our shareholders are now in the millions… these people are the owners of AMC, and I work for them,” CEO Adam Aron Said in the press release announcing the initiative.

Some observers of the company said that AMC’s stock trading may not make any sense, but this does not mean that it cannot continue to go against expectations.

“The AMC deal seems to have a new one this summer Star Wars, Avengers, with Batman Movies,” said Edward Moya, a strategist at the foreign exchange company Oanda. “The retail power behind this movement is still strong, so anyone can guess how big this bubble can grow. “