McCreath: Surge in AMC stock is 'ridiculous'
It turns out Québec theatre magnate Vincenzo Guzzo unwittingly got an early piece of the action in the frenzy surrounding AMC Entertainment Holdings Inc.
"Look, I don't understand it. I've got to be honest. I bought some shares early on when I think it was $1.50, $2 or $1.91, something like that," he said in an interview Thursday. "I sold them at $10! And the only reason why I waited to sell at $10 was because I actually had forgotten I had them.
"And when I realized the price was at $10, I dumped them right away."
Investors have taken shares of the U.S. theatre operator on a wild ride lately as it got swept up in the so-called meme stock rally that also put GameStop Corp. in the spotlight this year.
AMC shares have nearly doubled in value this month alone, climbing as high as US$72.62 per share earlier this week after languishing in the single digits at the start of the year.
The stock is most definitely not for the faint of heart, and that was made clear on Thursday as it swung wildly from a drop of as much as 40 per cent, to a gain of nearly 10 per cent, before closing the day down almost 18 per cent on the New York Stock Exchange.
That volatility came as AMC struck while the iron was hot with the sale of 11.55 million shares, and didn’t hide from the risks facing investors.
"The market prices and trading volume of our shares of Class A common stock have recently experienced, and may continue to experience, extreme volatility, which could cause purchasers of our Class A common stock to incur substantial losses," the company said in a filing.
"It's a little ridiculous," said Guzzo, the president and chief executive of Cinémas Guzzo, about the mania.
"Ultimately, I think there's something else at play here and I think it's got nothing to do, unfortunately, with the movie business. ...Regretfully, I think it's going to give a bad image to the industry once that share price does drop again. I hope it doesn't, but I haven't gone very far with hoping."