How AMC become Reddit's favorite meme stock

• 
  
  
  

Cristiano Ronaldo's removal of two Coca-Cola bottles during a press conference at the European Championship has coincided with a $ 4 bn fall in the share of the drinks company .The same thing happen with AMC and Game Stop whose prices are driven by ordinary Reddit Retail investors . Meme stocks are a form of " social uprising "said one market strategist 

What are Meme Stock ? 

A meme stock is a stock whose value can go up wildly beyond expectations and disregards fundamentals like profits, revenue or even leadership . Over the past years ,meme stocks have managed to cause powerful valuation changes in some stocks and created waves in investment circle . Karim Yousfi AudaCity Capital CEO   " Those players are getting stronger because of social media and we can't ignore them anymore " and AMC ? AMC is nothing but America Multi Cinema entertainment and it is the world's largest movie theatre chain .

Why is  everyone talking about AMC and Game Stop ?

Its stock price has skyrocketed by somewhere around 8000 per cent over six months .It has seen its stock surge about 1000 per cent in two weeks ,after a group  of amateur investors active on the online forum Reddit banded together to fight the Wall Street  funds that had pushed its price lower . here most of reader will think What's Game Stop ? GameStop is a video retailer . like most stores that still sell products in person ,it has had a hard time lately as video games sales have moved online and as the Covid -19 pandemic keeps people away from stores .It's still in business ,but few people expect it to grow again. on January12 ,the share of GameStop -  an American video game and gaming merchandise retailer closed at under $20 per share . In a matter of 10 trading sessions, the stock has jumped by over 15 times .

In a similar trend ,the share price of the movie theatre chain AMC Entertainment jumped 300 per cent to close at $19.88 taking its market cap to $6.74 billion.

But why this rise ?

The unprecedented rally in stocks is a result of an extraordinary frenzy among retail traders ,as they organised on the message board site Reddit to push up the share price . And as the share prices jumped ,it forced the short sellers in the stock to go for a' short squeeze ' leading to the staggering jump in the share prices. here you should understand term "Short Squeeze " it is a term used by market participant to refer to phenomenon where short sellers in a stock who have placed their bets on a stock's fall ,rush to hedge their position or buy the stock in the event of an adverse price movement ,in order to cover their losses .This leads to a sharp rise in demand for the share and huge rally in the share prices .