Shares of AMC Entertainment (NYSE: AMC) were taking a dive last month after the WallStreetBets rally cooled off and the stock gave back some of its monster gains in January. The sell-off came even as there was some good news out on the movie theater operator, which was nearly pushed into bankruptcy by the pandemic.
According to data from S&P Global Market Intelligence, shares of AMC lost 40% in February.
Image source: AMC Entertainment.
As you can see from the chart below, most of the decline came on the first day of the month, and it recouped some of its losses toward the end of February.
Shares of AMC unraveled on Feb. 2 as several of the popular WallStreetBets stocks, like GameStop, pulled back in early February after surging the week before. There was no material news out on AMC, but trading restrictions on brokerages like Robinhood seemed to add to pressure on the stocks, and many traders took the opportunity to pocket gains from the previous week when AMC shares briefly climbed to above $20.
As the rally faded, the stock bottomed out at around $5 per share and traded at that level for most of the middle of the month. Towards the end of February, the stock got another jolt, once again following in tandem with GameStop whose shares spiked on Feb. 22, though the only news out on the stock was that its CFO had left the company. That same day, AMC got the go-ahead to begin reopening movie theaters in New York City, a bullish signal for a broader reopening as the vaccine rollout accelerated. That rally continued most of the rest of the week alongside gains in GameStop.
AMC stock got off on the right foot in March, posting double-digit gains on March 1 as the company seemed to benefit from the approval of the Johnson & Johnson vaccine. Its executive team also received $8.3 million in bonuses for staving off bankruptcy, though it also looks like a poor use of funds for a company still in the midst of a crisis.
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