AMC said it plans to use net proceeds from any sale of shares for financing and theater acquisitions, among other things.
The smaller investors piling into AMC and other “meme stocks” like GameStop, the gaming retailer that had been rattled by shifting technology, are known in the industry as “retail investors.”
The distinction is used to separate them from the pension funds, mutual funds and other institutional investors that typically dominate a company’s ownership. At AMC, retail investors made up more than 80%, as of mid-March.
Retail investors have become a much more powerful force across the market in recent years. Easy-to-use trading apps and zero trading commissions have drawn in a new generation of traders. So did the pandemic, which meant millions of people were suddenly sitting on their couches with little else to do.
Social media has amplified their power further, with threads on Reddit, Twitter and elsewhere quickly building momentum for some stocks. It was most apparent early this year when AMC, GameStop and a handful of other beaten-down stocks suddenly surged to shock and awe Wall Street.
Volatility in shares of AMC Entertainment Holdings Inc. continued Thursday. Shares that had been up about 20% before the opening bell, tumbled 30% after the share sale was announced.
However, shares that had cost about $2 at the start of the year, now cost more than $46each.