For Retail Traders, AMC Has Become the Only Meme Stock

As meme stocks rocketed upward this week, one stock captured virtually all retail buyers. Retail traders funneling money into meme stocks put 93% of it into shares of AMC Entertainment Holdings, Inc.:

Stocks preferred by day traders soared 10% Tuesday, the most since early June as trading volumes accelerated. Long-short hedge funds that are quick to dump bearish bets were likely among drivers for Tuesday’s strength in stocks that have high levels of short interest, Vanda said in a report.

“Despite the broad rally in meme stocks, retail purchases were mainly concentrated on AMC, with over $56 million in Tuesday’s session,” Vanda’s Ben Onatibia and Giacomo Pierantoni wrote in a note. “All other meme stocks combined, totaled a paltry $4 million in net retail buying.” 

AMC Entertainment Holdings Inc. surged 20% Tuesday to the highest since July 9. 

For more than 90% of retail money in a category to go to a single stock, even for a brief period, is nothing short of extraordinary.

Hedge funds have begun to join the Reddit crowd, piling into heavily shorted meme stocks. They’re also carefully monitoring social media sites for the next hot play:

…a Goldman Sachs basket of the most-shorted U.S. shares has surged like never before to outperform the broader market by 31 percentage points this year. Retail buying of names most-shorted by hedge funds in 2021 like AMC Entertainment Holdings Inc. and GameStop is upending the once-popular quant trade.

In a survey with 100 hedge-fund managers overseeing US$231 billion conducted by SIGTech, nearly three-quarters said they’ve increased use of data from social media and chat rooms over the past year.

I’d be willing to bet some are doing a lot more than monitoring. They’re probably posting content of their own. And with the massive budgets of hedge funds, they can hire armies of coders to make their message omnipresent. 

An interesting new era is dawning in the hottest stocks in the market. The financial establishment is co-opting the hordes of small traders trying to take them down. 

Buckets of institutional money could move meme stocks like never before.

More on AMC and hedge funds:

SHORT SELLERS LOST $1 BILLION YESTERDAY IN AMC AND GAMESTOP

CHARTING THE HUGE DROP IN AMC FAILS TO DELIVER

HEDGE FUNDS HIT HARD BY MEME STOCK LOSSES, BADLY BEHIND S&P 500

Photo: “We’re #1” by 6S is licensed under CC BY-NC 2.0

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