‘We Were All Cocky’: AMC Investors Reflect on Their Bid to Take Stock to the Moon

An AMC Movie Theatre sits empty
Michael Buckner for Variety

For a brief moment, Aiden and his friends believed that they were investing gods.

Aiden is a 20-year-old business student at San Diego State University. In recent months he and his friends have been drawn to the Reddit group WallStreetBets, where users trade stock tips and brag about their “diamond hands.” They bought GameStop and AMC Entertainment, two ailing companies that the group predicted would take off in a short squeeze for the ages.

As the stocks rocketed upwards, they liquidated other positions so they could put more into both of them. Then they celebrated by watching “The Wolf of Wall Street” together. Aiden, who asked not to use his full name, confidently predicted that his investment would shoot to $40,000.

“I was definitely cocky. We were all cocky,” he said. “I thought it was going to the moon. Everyone on Reddit said it was going to the moon.”

AMC has had a brutal year, as the pandemic forced theaters to close worldwide and led to a near-total loss of revenue. The company was burdened by debt even before the shutdown, and has had to seek several rounds of fresh financing to stave off bankruptcy. The stock sank below $5 a share in September, and dipped briefly below $2 a share in the first week of January.

But then WallStreetBets got involved. On Jan. 27, the stock rocketed to $20 a share, as users rallied to stick it to hedge funds who had shorted the stock. But the euphoria was short-lived. Robinhood, the platform favored by many retail traders, restricted purchases of the stock and several others the following day, and the price collapsed. It was trading at just over $7 on Friday.

Many of the retail investors who flocked to the company in the last two weeks are still holding on, saying they believe it presents good long-term value, especially once the pandemic is over.

“I enjoy AMC. I enjoy going to the movie theater. One day we’re going to be back in theaters,” said Vince Santoria, a 22-year-old student from Oswego, Ill. “Maybe I invested a little with my heart, but that’s an OK thing.”

Whatever ultimately happens with the stock, Santoria is ready to chalk it up as a learning experience. He is in Phi Kappa Psi at the University of Illinois at Chicago, and he and some of his fraternity brothers have a group where they talk about stocks, throwing around the memes from WallStreetBets. But until buying into AMC and GME, he had been a lurker on the Reddit group.

Santoria acknowledged that he was “a little late to both the AMC and the GME party.” He bought AMC at an average cost of $15. He said he put in $3,000 to $4,000 on both options and common shares, and was down 53%. He has no plans to sell his common shares.

“I’ve quite enjoyed learning how to do things like trading options, and what a gamma squeeze is,” he said. “Maybe I don’t win on this trade, but I’ve learned something from this trade.”

Jordan Permenter, a 27-year-old video editor in Ocala, Fla., said he, too, purchased the stock because he believes in AMC’s future. He bought in at $6.50 a share and said he is “still holding for some reason.”

“That’s the theater I first saw ‘Star Wars’ in,” he said. When the pandemic is over, he predicted “people are gonna yearn for a big bucket of popcorn.”

On Wall Street, analysts are mixed on the company’s prospects. Michael Pachter, of Wedbush Securities, argued that the surge of retail investor interest was a positive signal.

“I truly believe once we’re back to normal, there will be six to seven months of the biggest box office,” Pachter told Variety. “I think (the company is) going to thrive.”

But Eric Handler, an analyst with MKM Partners, said the company will still face a tremendous debt burden even after moviegoing returns.

“It’s not just about getting through the pandemic,” Handler said. “This is a company that remains heavily leveraged. Survival comes at a very high cost.”

Verlin Campbell, who works in IT at Sony Pictures in Culver City, Calif., said he bought AMC shares back in March or April. In his mind, it was like supporting a restaurant by getting takeout.

“It felt like betting on my industry,” he said. “I didn’t do anything crazy. It was nothing that was going to make me rich or send me to the poorhouse.”

He was not expecting the stock to go up until moviegoers returned to theaters, so the Reddit craze caught him by surprise. Once Robinhood limited orders, he decided it was time to sell — and got rid of most of his shares at around $14, netting a few hundred dollars in profit.

“It was fun,” he said. “As someone who wasn’t one of the Reddit people, I learned a lot and the country did too and screw those Robinhood guys.”

For Aiden, it was not fun at all. He said that once his stocks started to plummet, he had “the most panicked four hours I ever had.” He tried to limit the damage, but ended up losing a few thousand dollars on Gamestop and making a little on AMC. One of his friends lost $10,000.

“I’m truly humbled,” Aiden said. “I realized how stupid this was. Why did I think of this as cool? I never thought of myself as someone who was easily manipulated by media or social media. I’ve gotta question that now. I can’t see myself going back and doing what I just did again.”