Movie theater chain AMC Entertainment has been one of the major “meme” stocks stirred up by hype from retail investors. Its shares are up 1,150% year-to-date despite its movie theater business being battered by the pandemic.

• Recently, AMC announced that it sold $231mn in newly issued shares to Mudrick Capital, a New York-based hedge fund specializing in distressed assets. With the sale, Mudrick gave clout to AMC stock with great reception from retail investors.

• Now, it appears that Mudrick was in to make a quick buck from AMC just like the many retail investors hyping the stock. A Bloomberg report said that Mudrick sold all its AMC shares on Tuesday, the very day that the movie theater chain announced Mudrick’s investment.

• According to the report, Mudrick Capital sold its AMC shares after concluding that the stock was ‘overvalued’. Such conclusion isn’t hard to come to given AMC’s stock market play over the past year.

• It appears that Mudrick saw it fit to purchase newly issued AMC shares in a private transaction with the company and immediately turned around to dispose of those shares on the wild public markets.

• Before now, Mudrick Capital had invested in AMC by purchasing bonds issued by the company. This February, it got a reported $200mn gain fueled by its debt and equity holdings in “meme” stocks like AMC and GameStop.

• Mudrick Capital is a firm with $3bn of assets under management. It’s led by Jason Mudrick, who founded the hedge fund in 2009.

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