AMC Leisure (NYSE:AMC), the erstwhile distressed movie show chain that has seen a dramatic reversal in fortunes amid a mind-boggling retail-driven inventory worth rally, continues to inflict crippling injury on its detractors.
In opposition to this backdrop, the hedge fund Odey Asset Administration has emerged as one of the distinguished casualties in latest occasions as AMC Leisure shares preserve their inexorable upward trajectory.
As a refresher, the London-based hedge fund had reported a considerable quick place in AMC Leisure again in August. Earlier than this disclosure, the fund had made a killing on its bearish wager as AMC inventory worth collapsed from $57 to $37 in July.
Nevertheless, the tables appear to have turned on Hanbury Odey, who manages the agency’s LF Brook Absolute Return fund and at the moment oversees round $1.5 billion in belongings. As an illustration, AMC Leisure shares have now breached the $50 worth degree and are up round 70 % since Hanbury Odey disclosed his bearish wager on AMC.
So, how a lot loss has Odey Asset Administration suffered? Effectively, Hanbury had beforehand acknowledged that his quick place in AMC was one among his largest winners, thereby offering a hefty contribution to the LF Brook Fund’s 3.7 % return as of early August. Nevertheless, with AMC having reversed virtually all of its losses in July, the fund now stands to lose its star performer.
In fact, Odey Asset Administration is just not the primary high-profile casualty of the continuing retail-driven mania in meme shares akin to GameStop and AMC Leisure. Again in January 2022, Melvin Capital was pressured to hunt a bailout after its quick place in GameStop blew up.
We had famous in a publish yesterday that, as per the tabulation by S3 Companions, GameStop short-sellers misplaced one other $100 million in August, bringing their cumulative losses to round $6.5 billion. Ought to the present rally in AMC Leisure shares proceed, its detractors are prone to face an analogous destiny.
With AMC Leisure and GameStop each inextricably linked through the continuing retail-driven mania, the 2 corporations are actually mulling a proper partnership. To wit, Liz Claman at Fox Biz has now tweeted that the CEO of AMC Leisure, Adam Aron, has reached out to GameStop for a potential tie-up:
BREAKING: $AMC @CEOAdam Aron to @ClamanCountdown: We’ve made contact with $GME @GameStop on a partnership, we’re not able to say what it’s.” says AMC now taking part in offense to get of us again to the theatres w/epic $25m advert spend
— Liz Claman (@LizClaman) September 8, 2022
Whereas the precise nature of this partnership is as but unsure, we had speculated yesterday that the tie-up would possibly contain GameStop’s latest push into the world of Non-Fungible Tokens (NFTs). GameStop has now activated a devoted website for NFTs that references gamers, creators, and collectors, thereby indicating an incoming ecosystem to cater to the gaming group. A implausible method for GameStop and AMC Leisure to collaborate can be for the theater chain to combine with GameStop’s upcoming NFT platform, permitting full interoperability and transferability. For example, theatergoers ought to be allowed to redeem their tickets for NFTs on GameStop’s platform and vice versa. This strategy wouldn’t solely create further demand for GameStop’s NFT platform but additionally permit AMC Leisure to faucet into this rising phenomenon, netting a win-win formulation within the course of.