the action was halted on Wednesday, which often happens when the news is about to be released. This was not the case with AMC shares.
One of the reasons that stocks can be stopped is that they are too volatile. AMC stock (ticker: AMC) went from around $ 50 at 12:15 p.m. to over $ 60 just over 10 minutes later. This move of more than 20% pushed the stock up 90% on the day. Needless to say, AMC is trading at an all time high.
Some users have sought to single out Robinhood, which was among the brokers who angered retail investors for restricting trading of certain memes in January. Robin Hood clarified in a post on Twitter that this recent shutdown was not limited to its platform and was automatically triggered due to volatility.
Investors could have been forgiven for expecting some news to come out. A 90% move in a day doesn’t happen that often, even in so-called memes stocks, and AMC has spoken of raising funds to make acquisitions. No announcement was made.
The shutdown briefly put some wind in AMC’s sails – the stock immediately fell below $ 50 once trading resumed, but stocks rallied and closed 95% higher at 62, $ 55.
As with GameStop’s rise in January, non-fundamental factors such as short-term interest and options activity are among the usual suspects. Some 582.2 million shares had traded as of 1:50 p.m. Wednesday, well above the 65-day average of 110.7 million, while 2.1 million calls and 1.1 million put options had also traded. While it’s unclear what caused the move, options trading likely contributed to the volatility.
AMC wasn’t the only stock of memes in play on Wednesday.
Bed bath and beyond
(BBBY) increased by 62%, while
(GME), the original meme stock, rose 13%.
The moves brought out the usual critics, baffled by the lack of fundamentals behind soaring stock prices.
“I never would have believed it, but the recklessness of a segment of retail investors seems to have no limits in this market,” Whitney Tilson of Empire Financial Research wrote in a note Wednesday. “This type of short-term rally is to be expected, and for stocks like these, this is an opportunity to add to a short or sell position as this is clearly a dead rebound.”
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