(Bloomberg) — Chinese billionaire Wang Jianlin’s Dalian Wanda Group Co. was facing headwinds on its AMC Entertainment Holdings Inc. investment as the movie chain was hit hard by the pandemic.
Then the retail investor army from Reddit’s WallStreetBets forum stepped in, helping send AMC shares up as much as 839% in January.
Wanda has taken advantage of the rally, cutting its stake to just 0.002% from 6.8% in an April 9 disclosure, according to a filing Friday. The company has gained about $675 million, including dividends, from its investment since 2012, according to a Bloomberg analysis.
Wanda bought AMC in May 2012 and took the company public the following year. It started to trim its position from 2018 as the conglomerate, which had accumulated large debts after acquiring overseas trophy assets, contracted its investments outside China.
AMC shares lost more than 70% of their value last year as the company struggled with the coronavirus pandemic. It considered options including a potential bankruptcy to ease its debt load, Bloomberg reported in October, citing people familiar with the matter.
Then day traders who congregated on Reddit’s WallStreetBets forum gave AMC and Wang more room to breathe, inspiring a turnaround in the stock. While the company has fallen from its high in January, the stock has still jumped to $13.47 from $2.12 at the end of last year.
The stock gained 12% as of 1:48 p.m. in New York on Monday as posters on a Reddit forum cheered on the news.
”The second coming is upon us! Been holding since January,” one Redditor wrote, while another posted “my AMC is green! Welcome back! Now to the moon please.”
Despite the gain, Wang’s fortune has continued to decline and he’s now worth $9.2 billion, according to the Bloomberg Billionaires Index, down $5.9 billion this year.
A spokesman for Wanda cited an earlier AMC statement saying the group’s film unit and AMC will enter into a long-term strategy and cooperation agreement.
(Updates with Reddit traders activity in eighth paragraph)
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