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Expand chart
Data: EODData; Chart: Will Chase/Axios

AMC's share price reached an all-time high last week, thanks to retail investors looking to stick it to institutional shareholders.

Why it matters: The theater chain's wild ride on Wall Street points to the power of "meme stocks" in boosting distressed assets even when markets are volatile.

  • Retail investors have rallied around AMC online via forums like Reddit — a phenomenon smilier to what happened to GameStop in January.
  • AMC was the most-traded stock in May.

How it works: Institutional investors borrowed money to buy shares of AMC, expecting the stock price to fall, with the hope of buying the stock back at a much lower price.

  • These "short-sellers" have lost over $1 billion on AMC's stock over roughly the past week, per CNBC, thanks to retail investors buying up the stock.
  • AMC's share price has soared since the beginning of the year, jumping from roughly $2 in January to $26 by Memorial Day weekend. It peaked last week at $36.72.

Yes, but: Even though AMC is expected to partially recover as theaters begin to reopen, the company's financials are still in disarray.

  • While the company has records levels of liquidity, that cash can only keep the theater chain afloat for so long without enough steady revenues coming in.
  • AMC isn't expected to generate positive cash flow for at least the rest of the year. It narrowly avoided bankruptcy last year thanks to a $917 million cash injection.
  • The company said months prior that without that money, its cash-burn rate would've driven it to bankruptcy by year's-end. AMC has tried to keep as many theaters open as possible, despite COVID-19 capacity restrictions.

The big picture: Many analysts don't expect theater revenues to ever fully revert to pre-pandemic levels, although it saw a healthy recovery the past few days.

  • The box office brought in an estimated $100 million over the holiday weekend, compared to roughly $230 million in 2019.
  • On its first quarter earnings call three weeks ago, AMC CEO Adam Aron said the company has "taken share" from other major theater chains that have stayed closed or those who have gone bankrupt, among other factors.
  • It announced $230.5 million in new fundraising via an equity sale on Tuesday to buy new leases and upgrade existing theaters, Variety reports.

What to watch: Some analysts say it's still likely that the company goes bankrupt this year.

  • "They will trip debt covenants if attendance does not get back to 90% of pre pandemic levels," LightShed Partners' Rich Greenfield told Axios.

Editor's note: This article has been updated to add the new fundraising numbers.

Go deeper

Movies make Memorial Day comeback

Photo by Rick Kern/Getty Images for Paramount Pictures

The holiday weekend saw a resurgence at the box office, breathing new life into an industry that barely survived the pandemic.

Why it matters: "There may not be enough adjectives to describe the importance of this weekend’s box office performance to movie theaters," Comscore senior media analyst Paul Dergarabedian tells Axios.

Updated 33 mins ago - Science

NTSB probes crash that killed 10 in Alabama as storm lashes Southeast

A car drives in the rain in Galveston, Texas. Photo: Zeng Jingning/China News Service via Getty Images

The National Transportation Safety Board announced Sunday that it's investigating a fiery multi-vehicle weekend crash in Alabama that killed 10 people, including nine children, as storms swept the Southeast.

The big picture: Saturday's crash on Interstate 65, south of Montgomery, occurred amid a tropical depression that left 13 people dead in Alabama as it triggered flash floods and spawned tornadoes that razed "dozens of homes," per AP.

Laurel Hubbard to become 1st openly trans athlete to compete at Olympics

New Zealand's Laurel Hubbard at the Gold Coast 2018 Commonwealth Games in Australia, when she became the first openly transgender athlete to represent NZ. Photo: Scott Barbour/Getty Images

The New Zealand Olympic Committee has announced that Laurel Hubbard has been selected for the women's weightlifting team for the Tokyo Games — making her the first openly transgender athlete to compete at the event.

The big picture: Hubbard, 43, is part of a five-member Kiwi weightlifting team and will compete in the women's super heavyweight category. Meanwhile, BMX rider Chelsea Wolfe will become the first openly trans athlete to travel to the Olympics with Team USA, when she arrives in Tokyo as a reserve rider.