Author Bio
Howard grew up in Philadelphia watching the Philly sports teams struggle for championships. He has been investing since 1989 and been a Fool since 2001. Prior to joining The Fool as a contract writer in 2019, Howard worked in the steel business as an engineer for 28 years. When he isn’t writing, he is usually out for a run, or relaxing to the music of the Grateful Dead.
What happened
AMC
Entertainment Holdings (NYSE:AMC) popped another 85% at the market open Friday and had settled back to a 58% gain at 9:55 a.m. EST.
The Reddit user rally continues after Robinhood opened trading back up on several highly volatile names involved in the ongoing short squeeze phenomenon.
The story reads like a thriller novel.
Traders who hang around a Reddit board called WallStreetBets have been getting together to make bets on a bunch of stocks over the last few years. One of those stocks was
GameStop Corp. (NYSE: GME).
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One of these would-be traders noticed that shares of GameStop were heavily shorted.
Very heavily shorted.
The Reddit traders started buying the stock and short-dated call options to drive out the shorts.
You see, when traders sell a stock short, they borrow the shares, sell them, and then plan to rebuy them later at a lower price, netting a profit. But when share prices start climbing, they re forced to cut their losses and buy back the stock at the higher price or else risk financial ruin. This is called a short squeeze, and the buying from it, called short covering, also helps push the share price higher.
GameStop: qué es la venta en corto y por qué las plataformas de trading restringen su operatoria cronista.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from cronista.com Daily Mail and Mail on Sunday newspapers.
Tuesday, 26 Jan 2021 08:50 AM MYT
View of a closed AMC movie theatre near Time Square October 12, 2020 in New York City. AFP pic
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NEW YORK, Jan 26 ― US movie theatre chain AMC announced yesterday it had raised US$917 million (RM3.7 billion) in funding since mid-December, allowing it to fend off bankruptcy for now as Covid-19 batters the film industry.
“This increased liquidity should allow the company to make it through this dark coronavirus-impacted winter,” the company said in a statement.
The news delighted investors, with shares soaring by up to 39 per cent on the New York stock exchange. At 2.15pm (1915 GMT), the stock was up 30 per cent at US$4.57.