Reddit traders pushing AMC stock have helped add over $120 million to CEO Adam Aron's fortune since the start of the year
Albert L. Ortega/Getty Images; Samantha Lee/Business Insider
- AMC's rising stock price has added over $120 million to CEO Adam Aron's fortune.
- Aron owns roughly 4.8 million shares of AMC and hasn't sold since the Reddit rally began.
- Short interest in AMC remains high at ~20% despite Reddit traders burning short-sellers for $2.29 billion this year.
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AMC's chief executive officer Adam Aron has been reaping the rewards of Reddit traders' push into heavily shorted stocks.
The CEO has seen his fortune jump by over $120 million since the start of 2021 as AMC's stock has risen roughly 1,500% amid a Reddit-induced rally.
Aron owns or has been granted roughly 4.2 million shares of AMC stock, and unlike other executives, he hasn't sold since the start of the year, according to CNBC.
The CEO did gift over $15 million worth of shares to his two sons in March, but beyond that, Aron has managed to net over $120 million in paper gains on his stock holdings by simply not selling.
AMC has been the target of Reddit traders for months now due to its high short interest. Traders on the platform have been attempting to squeeze short-sellers out of their bearish bets, causing AMC's stock price to rocket higher.
Even with the Reddit crowd targeting AMC for months, and a surging stock price, the company's short interest remains high at around 20% of outstanding shares, according to data from S3 Partners.
In 2021, AMC short-sellers have lost $2.29 billion as well, but that hasn't stopped them from doubling down.
Last week alone, short-sellers added 2.97 million shares to their bearish bets, all while paying an 8% fee for the privilege, S3 partners data shows.
Despite AMC's recent rise, analysts remain mostly bearish on the company's long-term prospects as the theatre business remains in secular decline.
Capital Market's Alan Gould reiterated his "sell" rating and $1 price target on shares of AMC recently, saying the stock "does not reflect fundamental value."
AMC recently raised $230.5 million in cash from Mudrick Capital, selling 8.5 million shares for $27.12 each, a dollar higher than the stock's Friday closing price.However, just hours later, Mudrick Capital sold its stake and called AMC overvalued.
Even with Mudrick's exit, AMC's stock jumped double digits on Tuesday as Reddit and retail traders continue to pile on, and shares of AMC traded up 21.76% as of 9:15 a.m. ET on Wednesday morning.
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