A dizzying run for meme stocks like AMC Entertainment Holdings Inc.
continued on Wednesday, setting the chain’s stock on course for a closing high.
AMC shares have more than doubled and are on the verge of their first record close since 2015.
Bed bath in addition Inc.
up 45%, on its way to its biggest one-day advance on record. GameStop added 10% in the last trade.
Their rally is reminiscent of late January when individual investors teamed up on social media platforms like Twitter and Reddit to propel stocks higher.
Individual investors have continued to tout AMC on Twitter for the past few days, vowing not to sell their shares. AMC recently said that individual investors own 80% of the company.
The latest leg of the rally in AMC coincided with the craze that one major investor, Mudrick Capital, had,
bought a large portion of the company’s stock, although it sold out shortly afterwards.
In addition, the company said on Wednesday that it would reward the loyalty of individual investors who had bet heavily on its stocks this year and give them special advantages in theaters.
“We’ll start with a free big popcorn for us when they see their first movie at an AMC theater this summer,” the company said in a statement on Wednesday.
There were also some unexpected beneficiaries of the rally in meme stocks: GameStop and AMC are part of the Russell 2000 Value Index and a large exchange-traded fund that tracks the measure, the iShares Russell 2000 Value ETF Value,
rose 29% to Tuesday this year, far surpassing its growth colleague’s 4.3% increase. According to Dow Jones Market Data, this is the largest outperformance by June 1 of a year since 2000.
The addition of meme stocks to the meter came as a surprise to some professional investors, as value investors are usually looking for bargains in the stock market and betting that they will appreciate.
GameStop and AMC are already up more than 1,300% this year, and many professional investors sought to capitalize on declines in stocks by selling short, confident they were overvalued.
Write to Gunjan Banerji at Gunjan.Banerji@wsj.com
Copyright © 2020 Dow Jones & Company, Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdeb8