The AMC cinema chain is also suffering from the corona pandemic. But the company’s stock soared in the past week – thanks to small investors on Reddit. A major investor took advantage of this.
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Due to the corona pandemic, cinemas are closed or poorly attended in some countries. The AMC cinema chain, for example, which operates worldwide, has suffered from this.
But at the end of January, the company’s share price suddenly soared. The reason: users on the online platform Reddit. They had discussed on the Reddit sub-forum r / wallstreetbets about investing in the stock of the cinema chain. The increased purchases drove the price of the security up.
Financial investor benefits from Reddit investments
In addition to a few small investors, financial investor Silver Lake, who held many shares in the AMC cinema chain, also benefited from the affair. According to its own information, Silver Lake used the price increase to sell its shares for $ 713 million.
Silver Lake sold the papers in a number of transactions in the market. In the past year, AMC dividend coupons fell by 70 percent to 2.12 dollars because the cinema chain had to close its movie theaters because of the corona pandemic. On the day of the sale, the shares were trading at $ 19.90.
The battle for Gamestop shares continues
The background to the whole thing is a battle for the value of the shares in the game retailer Gamestop. It has risen again and again in recent weeks and even reached record values of 420 euros at peak times. In July 2020, the security was worth around four euros. The reason for this was also the so-called shorting by hedge funds, which Reddit users say they want to fight. more on the subject read here.
As with AMC, many Reddit users initially invested in the Gamestop share and thus drove the price up. In the course of this, the forums also discussed whether to invest in the stocks of AMC, Nokia and Blackberry, which also led to a price increase. In the meantime, however, the purchase of the corresponding shares has been prevented on certain trading platforms. This meant that the value of the Gamestop share in particular fell briefly to just over 100 euros, but has now reached around 270 euros again.
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