AMC Networks is notably different than AMC Theatres. But there might be some confusion about that on Wall Street today.
Video game retailer GameStop's stock has been soaring lately thanks to day traders on the Reddit WallStreetBets forum. As The Wall Street Journal explains, "ordinary investors, stuck at home in the pandemic," are "buying things Wall Street has bet against," all while touting "their long-shot wagers with the expression 'YOLO.''
And on Wednesday, AMC Theatres, the theater chain that has been narrowly avoiding bankruptcy over the past year as its industry is hit hard by the pandemic, saw its stock soar. Reddit users, The Verge writes, are "turning their attention" to AMC, "creating memes and spamming AMC emoji in an effort to convince thousands of people to buy AMC stock." The theater chain seemed to be the latest beneficiary of what Bloomberg dubbed the "GameStop effect."
But if you're inclined to buy AMC Theatres stock, make sure it's AMC Entertainment, not AMC Networks. After all, the latter is actually the company that owns the AMC cable channel, not the AMC theater chain. Yet analysts pointed out that both AMCs were having a good morning, maybe thanks to some confusion about this distinction.
"For all of the retail investors out there saying they are so sophisticated, please explain why so many of them are confusing the stocks of AMC Theatres with AMC Networks," CNBC's Andrew Ross Sorkin wrote.
At the same time, CNBC's Alex Sherman offered an alternate theory, writing, "I actually think it's because [AMC Networks] is one of the most shorted companies — and they're all spiking." Sherman added, "It just so happens that two AMC entertainment companies are thought to have businesses in deep trouble!"
Either way, anyone who was confused has now learned the importance of knowing your AMCs.