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Being a meme stock is a lot like being Spider-Man: You get bit by a strange insect, gain supernatural strength but are super awkward about it, then eventually harness your new skills to save the world.
Right now,
- Through the program, individual investors will get benefits like a free large popcorn and invitations to special screenings.
Zoom out: After gaining a stunning 96% yesterday, AMC stock has now increased nearly 3,000% in 2021, which it owes to frenzied interest from retail traders who own more than 80% of the company's outstanding shares.
But only recently has AMC decided to take advantage. Over the weekend, it sold $230 million worth of stock to a hedge fund in order to "go on the offense again."
What it all means
It's become clear that "meme stock mania," the phenomenon of an asset shooting up in price for no other reason than it's trending on social media, is a feature, not a bug, of modern financial markets. We thought
- Dogecoin, the crypto based on a joke, popped more than 30% yesterday in anticipation of Coinbase allowing it to be traded on its Pro platform. With a market cap of about $54 billion, it's now the sixth-most valuable crypto.
- An Elon Musk tweet about the viral song "Baby Shark" sent shares of Samsung Publishing, a company that owns a big stake in the song's producer, up more than 10%.
Looking ahead...given AMC's success in leveraging its internet fame for tangible business improvements, other meme stocks might follow its lead.
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