During GameStop Halts, AMC Becomes a Bellwether for Day Traders

Vexed by Wednesday’s repeated halts in GameStop Corp. shares, day traders were left grasping for clues on where the stock’s chaotic journey would pick up after the restrictions were lifted.

They didn’t have to look far.

AMC Entertainment Holdings Inc., another wildly popular meme stock among members of Reddit’s WallStreetBets forum, was a near-perfect predictor for how the market would react after each of the seven pauses.

The movie-theater chain’s shares plummeted as the first GameStop halt triggered at 12:22 p.m. in New York and continued to fall through the two stoppages that would follow. But at 12:40, just as the video-game retailer’s shares were to cease trading yet again, AMC’s stock began to rally. It was after that fourth pause that GameStop too would change course.

During GameStop Halts, AMC Becomes a Bellwether for Day Traders

Lily Francus, an independent quantitative researcher, wrote about the relationship on Twitter.

“In general the stronger the meme effect on the stock the more highly correlated its associated basket is,” Francus wrote on Wednesday. “AMC acts as a price discovery mechanism for GME during halts.”

It makes sense that GameStop and AMC have moved in tandem. They’re the two most-mentioned names on StockTwits and garner incessant attention from day traders on Reddit. At the same time, there’s been growing concern about a disconnect between the pair’s future prospects as Covid-19 lockdowns are lifted.

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