AMC Entertainment Holdings (NYSE: AMC) stock soared almost 80% in intraday trading Monday following the return of meme-stock guru Roaring Kitty to social media via a post on X (formerly Twitter).
The re-emergence of Keith Gill, famously known as Roaring Kitty, on X (formerly Twitter) has ignited a surge in both GameStop (NYSE: GME) and AMC Entertainment (NYSE: AMC) stocks. Roaring Kitty, a central figure in the historic meme stock craze of 2021, has returned to the spotlight after nearly three years of absence from social media.
The comeback of Gill came with a cryptic post on X featuring a meme of a man leaning forward with a video game controller, symbolizing heightened interest or intensity.
The former MassMutual employee gained prominence for leading the meme stock frenzy of 2021, which propelled both GameStop (GME) and AMC Entertainment (AMC) to unprecedented highs through his posts and videos on X, Reddit (NYSE: RDDT) and YouTube.
Gill began his journey by posting educational investment content on YouTube in 2015 before joining Reddit in 2019. In the same year, he invested $53,000 in GME stock, which surged to nearly $48 million at its peak in January 2021, thrusting him into the mainstream spotlight.
His return has stirred excitement among retail investors, but analysts caution against banking on sustained gains, especially considering the tumultuous history of meme stocks.
AMC Stock Still Below January 2021 Peak
While Gill’s comeback has sparked enthusiasm, it’s essential to recognize the underlying challenges facing AMC Entertainment. Despite recent gains, AMC stock remains significantly below its January 2021 peak, down by 98%. The company continues to grapple with the aftermath of the pandemic, with revenue trailing pre-pandemic levels and the rise of streaming platforms posing ongoing threats to its market share. In addition, AMC’s financial situation, including its high debt levels and dilution of shares, continues to pose concerns for shareholders.
As of March 31, AMC had corporate borrowings of $4.54 billion with a cash balance of $624.2 million. The outstanding shares totaled 263.4 million, up from 137.4 million a year ago, representing a rise of about 92%. Shareholders have keenly felt the impact of dilution, with AMC’s stock down over 90% year-over-year.
While Gill’s return may generate short-term excitement, it does not alter the underlying fundamentals of AMC. Shareholders should be mindful of the company’s financial challenges and the potential for continued volatility in its stock price.
AMC Entertainment (NYSE: AMC) Stock Reaction
AMC stock surged 78.35% to close at $5.19 on Monday. Its value increased by 57.75% this week. Trading activity has witnessed 522,639,584 (522.63 million) shares changing hands, well above the average daily volume of 25.49 million.
