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AMC soars 15% as Reddit shares and reopening favorites drive selling

  • Shares of AMC Entertainment climbed as high as 18% on Monday, joining a broader rally and reversing the tech selloff.
  • AMC was boosted by news that Wedbush doubled its price target on optimism around the economic recovery.
  • Reddit favorite stoppage of play also jumped on Monday as well as the airlines.

Shares of AMC Entertainment climbed 18% on Monday, joining a broader rally as Reddit darlings and reopening favorites resisted the tech selloff. The stock pared some gains, closing up 15% for the day.

AMC joins the Reddit favorite stoppage of play on Monday, which jumped 43% after the video game retailer announcement this board member and founder of Chewy Ryan Cohen will lead its strategic transformation. Cohen lobbied for the company to move in a direction similar to that The e-commerce giant Amazon has taken.

Airlines companies including Delta, Southwest, United and American, all also soared on optimism of an economic recovery thanks to the Senate’s approval of the administration’s $1.9 trillion stimulus package over the weekend. -end. Disney, meanwhile, hit a record high as California has set an April 1 date for a limited reopening of theme parks in the state.

AMC, a meme stock and another Reddit darling, also rose on news that Wedbush analyst Michael Pachter doubled his price target from $2.50 to $5.00 on optimism of a post-pandemic environment. Pachter raised concerns about the theater chain’s debt burden.

The Wedbush report said AMC took the right reopening precautions, which allowed it to “increase footfall in recent months, while many major markets were closed for several months as the virus continued. to spread”.

But he also said “AMC could take years before it can revisit its previous growth strategy as it pays down its mounting mountain of debt.”

The analyst has maintained a neutral rating in place since March 2020.

Year-to-date, AMC’s share price has skyrocketed more than 500%, thanks in large part to a group of retail traders on Reddit’s Wall Street Bets forum targeting sold stocks. shorted by hedge funds.