AMC, BlackBerry shares jump as Reddit rally powers on

[BENGALURU] Shares of "meme stocks" AMC Entertainment and BlackBerry jumped in early deals on Thursday, extending a red-hot rally driven by small-time investors on online trading platforms.

AMC's stock was last up 14.5 per cent at US$71.60 after nearly doubling in value on Wednesday and attaining a market capitalisation of more than US$28 billion. US-listed shares of BlackBerry surged 29.1 per cent, bringing their total gains this year to over 130 per cent.

The latest leg of the rally, which drove up shares of video game retailer GameStop by 1,600 per cent in January, has again been powered by amateur inventors acting in concert to bid up shares of stocks with a high short interest, forcing bearish investors to unwind their bets at a loss.

"Although we have seen some exiting of positions throughout the year, the majority of short-sellers have been happy to sit on significant paper losses in the hope that retail investors will blink first and the losses won't be realised," said Peter Hillerberg, co-founder of financial analytics firm Ortex.

"This now looks like a flawed strategy." Investors shorting AMC are estimated to have lost US$2.75 billion on Wednesday alone, data from Ortex shows. Short interest in AMC is currently estimated to be 21 per cent of the free float, according to Refinitiv data.

Shares of other Reddit favourites including GameStop and Koss Corp rose 1.1 per cent and 5.2 per cent, respectively.

On Reddit's WallStreetBets discussion thread, users continued to cheer the rally in shares of AMC and BlackBerry.

"We can't stop... They can't stop us, although they try...we're true soldiers, we don't die... We keep rolling...," posted one user, u/Ninjatruth.

REUTERS