AMC up 40% as Reddit bulls drown out hedge fund share dump

Shares of AMC Entertainment surged another 38% in early deal on Wednesday and were set to open at a record high as individual traders on social media forums were unfazed by a hedge fund flipping its stake in AMC calling it's overvalued

Hedge fund Mudrick Capital Management sold 8.5 million  AMC shares at a profit on Tuesday, a source said, immediately after buying them. AMC had earlier said it had been prepared to form acquisitions with the new issuance, worth about $230.5 million. read more

Extending a hotdog rally, the cinema operator's stock traded at $41.90 on Wednesday, leading gains among the group of "meme stocks" including game retailer GameStop Corp  and BlackBerry Ltd that have attracted the eye of small-time traders on online platforms like Reddit's WallStreetBets.

"It's not rational, but don't bet against it," said a Berlin-based trader.

AMC's stock has surged over 1,400% this year and, at nearly $42, is trading at over 10 times the median analyst price target.

The number of messages associated with AMC on trading-focused social media site Stocktwits rose over 7% on Wednesday, with most of them reflecting a positive sentiment.

AMC daily stock trading volumes within the past week have reached their highest since January, in step with Refinitiv Eikon, while data from Fidelity showed it continued being the brokerage platform's most traded scrip.

GameStop was up 4.5% in premarket trading, while Koss Corp  jumped 13%. BlackBerry's U.S.-listed shares were last up 18.6%, bringing their total yearly gains to quite 75%.