Sirwin
Sirwin

The Day That Mudrick Capital Went From WSB Hero to Villain and How the Apes Struck Back


Just this morning, AMC (NYSE: AMC) disclosed that Mudrick Capital had agreed to purchase $230.5 million worth of new shares last week. The 8.5 million shares were bought at price of approximately $27.12 per share. As this news broke, Wall Street Bets meme Traders aka "the apes" (as they call themselves) praised this institutional backing. Last week, AMC shares soared 91% thanks to the Apes.

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Less than 7 hours after AMC disclosed the capital raise and Mudrick's new stake, at 1:30 p.m. EST, Mudrick disclosed to Bloomberg that they had sold their entire stake in the movie theater chain. Calling the shares grossly overvalued, Mudrick appears to have made a sizeable gain from a short-term meme trade, to the tune of $30 million. The shares were freely tradeable. It seems that the institution has taken a page out of the Wall Street Bets playbook and successfully capitalized on it.


The Wall Street Bets Apes have not taken Mudricks' trade too kindly. It now appears as though the Apes are dumping and/or shorting stock of Mudrick Capital Acquisition Corporation II (NASDAQ: MUDS), a special purpose acquisition company which is set to merge with the collectible card and confectionery company Topps later this year. Shares of MUDS have fallen as much as 16% today. It's no coincidence this drop has happened the same day Mudrick went from hero to villain, in the eyes of WSB.


What we have here is yet another chapter in the ongoing saga of retail versus institutions. Even business media outlets don't quite know what to make of the situation. Surely, they thought, the GameStop Fiasco in January would be the nail in the coffin for Reddit meme traders. It appears that so long as there is liquidity, the meme trading will continue.

The WSB Reddit meme traders are projecting AMC to continue its uptrend, not just to $300, but all the way to $100,000 per share. Stay tuned!

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This blog is not intented as, nor should be interpreted as financial advice.


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RocketEnthusiast
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dot com boomer - writing mostly on crypto, stocks, entertainment, etc.


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