Opinion | AMC's actual business doesn't matter to meme stock traders

Now, from the point of view of AMC's underlying business, raising more capital was unquestionably the right move. So why did AMC's investors oppose it? Because meme-stock traders aren't, as a group, all that interested in the businesses of the companies they invest in. They're interested in their portfolios' stock prices.

The traditional view of stock valuation is that the two things are connected: A company's stock price ultimately reflects the value of its business. Meme-stock traders have a different view: They see a stock's price as something that's set by an act of collective will and by gaming the system. And issuing more shares would make gaming the system harder by increasing the number of shareholders and making it harder to squeeze short sellers.

Now, this seems like an obviously shortsighted approach. AMC still has more than $5 billion in debt on the books, and its core business is still struggling. And the stock's performance of late suggests it was a bad decision: The price is down by almost 30 percent in the past three weeks.

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Source: CNBC - 🏆 12. / 72 Read more »