It's a new day for retail investors: The CEO of AMC Entertainment has given them a shout-out, offering a direct line to his company and special perks at his theaters. And they rewarded him handsomely by pushing AMC shares up more than 100% in one day to a record high.
The movie theater company on Wednesday launched its new Investor Connect marketing campaign to speak directly to the masses. AMC’s loyal retail shareholder base makes up about 80% of AMC ownership (as of March 11), and Investor Connect, a new platform for retail traders on AMC's website, will keep them up-to-date on business matters and reward them with perks like free popcorn (large, available at movie theaters in the U.S. this summer).
“During my five-plus year tenure as CEO at AMC, I’ve taken great pride in the relationships I have forged with AMC’s owners,” AMC CEO Adam Aron said in a statement. “With AMC Investor Connect, that effort in relationship building will continue apace even if our shareholders now number in the millions. After all, these people are the owners of AMC, and I work for them.”
Over the past year, retail investors have entered the markets in droves. Homebound for much of the year because of the pandemic and flush with stimulus cash, individual investors jumped into trading with a vengeance. Earlier this year, traders communicating on the social media platform Reddit drove up shares of video game retailer GameStop, causing extreme volatility in the markets and grabbing the attention of Wall Street, Congress, and regulators.
Although GameStop was the primary target, some of the frenzy spilled over to AMC and other stocks, causing some brokers to adjust their margin requirements for trading these companies.
Many Wall Street analysts dismissed the power of the people, saying this was just another sign of a frothy market. But Aron, for one, is not writing them off so easily.
AMC estimated that, as of March 11, more than 3.2 million individual investors owned AMC shares, which more than doubled during Wednesday’s trade to reach a record intraday high of $72.62, as “AMC to the Moon!!!” trended on Reddit.
In an unusual step, Aron broke ranks last month when he directly acknowledged individual investors in the company’s first-quarter earnings call, usually the stomping ground of Wall Street analysts, institutional investors, and some journalists. Aron told his buttoned- up audience “just go on Twitter, just go on Reddit, just go on YouTube. Read what these people write.”