AMC Entertainment Holdings Inc. resumed its upward trajectory in premarket trading, halting two days of declines for the money-losing movie theater chain that’s become the new favorite of meme-stock investors.
The stock traded at $50.03 as of 5:19 a.m. in New York, up 4.5% from Friday’s close. The stock more than doubled on the first two days of a holiday-shortened last week, before giving back some of those gains after insiders cashed in with a flurry of share sales.
On the brink of bankruptcy only a few months ago, AMC is now the darling of retail traders, with this year’s 2,200% gain ranking as the most of any stock in the Russell 3000 Index. The stock’s surge has enabled the company to sell equity and shore up its shaky balance sheet.
A forthcoming reshuffle of the Russell Indexes could pose a problem for the likes of AMC and GameStop Corp., which started the meme stock craze back in January. Their enlarged market caps of $24.6 billion and $18.4 billion, respectively, put them in line for a move from the Russell 2000 small-cap stock index to the Russell 1000 index of the biggest American companies.
“The graduation of these high-fliers could be the beginning of the end of their epic run," Wells Fargo analysts Christopher Harvey, Gary Liebowitz and Anna Han wrote in a note Friday.
