AMC board members sold close to $4 million in shares this week, cashing in on the company’s latest monster rally fueled by its “meme stock” status.
Three members of AMC’s board of directors each sold-off shares worth more than $800,000, while two more members sold shares worth more than $700,000 per director, according to Securities and Exchange Commission filings.
Three of the transactions took place on Tuesday, when AMC stock traded as high as $59 per share. Two more transactions took place on Wednesday, as AMC stock slipped from above $52 at opening to below $49.50 at close.
AMC shares were trading at about $42.80 on Friday morning — down more than a quarter from Tuesday’s high but still 20 times higher than at the beginning of 2021.
The five directors — Philip Lader, Adam Jay Sussman, Howard Winchell Koch Jr., Kathleen M. Pawlus and Anthony J. Saich — now own 17,722 AMC shares each.
Their current stakes were worth about $750,000 each on Friday morning.
AMC, which saw its business all but destroyed during the coronavirus pandemic, has been targeted alongside other so-called meme stocks like GameStop and Blackberry since January.
Last week, the movie theater sought to cash-in on the meme stock boom when it announced it would issue 11.5 million new shares.
But AMC also warned investors that they could lose all of their money.
“Under the circumstances, we caution you against investing in our Class A common stock, unless you are prepared to incur the risk of losing all or a substantial portion of your investment,” AMC wrote last Thursday in a filing with securities regulators.
The company also admitted that its sky-high price “reflect market and trading dynamics unrelated to our underlying business, or macro or industry fundamentals, and we do not know how long these dynamics will last.”
Earlier in June, AMC issued 8.5 shares that it sold to hedge fund Mudrick Capital for $230.5 million. Mudrick then immediately flipped the shares for a tidy profit.
In recent weeks, Reddit traders have branched out from AMC and Gamestop into another, more controversial “meme stock” called Clover Health. Clover’s founders have faced accusations of ripping-off New Jersey hospital patients.