AMC investor nets swift profit following latest Reddit memestock trading frenzy

Another rapid surge in the price of shares in cinema chain and Reddit investor favourite AMC Entertainment Holdings Inc (NYSE:AMC) overnight has netted a tidy profit for a New York hedge fund as institutional investors sought to ride the coattails of the latest retail trading frenzy. On Tuesday, AMC said it had sold around 8.5mln shares to Mudrick Capital Management at a price of US$27.12, a premium to its Friday closing price of US$26.12, raising around US$230.5mln for the company. READ: AMC Entertainment soars again as Reddit raiders squeeze short sellers The share price promptly surged during yesterday’s session on the back of the news, however, according to reports citing sources close to the matter Mudrick had sold off its entire position in AMC before the day was out, netting a US$25mln profit in the process. Mudrick’s strategy marks something of a change of tactic for institutional players in the market, which now seem to be looking at ways to exploit share price surges instigated by legions of retail traders, often encouraged by members of the Reddit forum r/wallstreetbets, in order to rake in large profits quickly. Some institutions also seem to have learned a lesson from similar surges in value for AMC and video game retailer GameStop Corp (NYSE:GME) earlier in the year, when the sudden and dramatic rises in value caused massive losses for institutional funds holding large short positions against the relevant stocks. Despite Mudrick reportedly cashing out overnight, AMC shares seemed to be continuing their ascent in pre-market trading on Wednesday, up 17% at US$37.50. Shares in AMC are also up around 1,760% so far this year.