Shares of AMC Entertainment (NYSE:AMC) jumped double digits on Friday as Reddit traders kept piling into the speculative name this week.
The stock popped $6.26, or 23.6%, to $32.78, in Friday’s first hour, following a 35% advance in the previous session. Shares have already rallied nearly 120% week to date, bringing its monstrous 2021 rally to 1,150%.
AMC was the most active stock on the New York Stock Exchange by far on Thursday with nearly 700 million shares changed hands. Its 30-day trading volume average is just above 100 million shares
The movie theater chain has replaced GameStop (NYSE:GME), to become the most popular stock in the infamous WallStreetBets Reddit forum, according to Bank of America’s analysis of stock mentions on the platform.
Enthusiastic Reddit traders are encouraging each other to double down on AMC’s stock and call options by sharing screenshots of their portfolio and touting massive return. One trending post on WSB Friday reads: ”$AMC YOLO UPDATE : 4948 shares, 10 calls, across 4 brokerages, and I still ain’t selling!”
GameStop, which was the star of the show amid the January retail trading mania, is up a relatively mild 40% this week.
AMC’s surge this week has already inflicted a $1.3 billion loss for short sellers, according to data from S3 Partners.
Short covering could be fueling AMC’s massive rally this week. When a heavily shorted stock jumps higher in a rapid fashion, short sellers are forced to buy back borrowed shares to close out their short position and cut losses. The forced buying tends to accelerate the rally even further.