“I’ve had a little bit of PTSD over the last couple of days,” Kennedy said Wednesday on CNBC’s “Squawk on the Street.” “I remember getting five different calls from Nasdaq in a single day about our stock being halted because the short sellers were being squeezed so badly.”
As the CEOs of GameStop and AMC now find themselves in a similar yet strange position to what he experienced just a few years ago, Kennedy offered a cautionary perspective.
“My advice to those CEOs would be that, at times like this, your company is not your stock and your stock is not your company,” he said. “Keep it all in perspective as these very unusual market dynamics are taking place.”
In July 2018, Tilray shares hit an intraday low of around $20 before they began to rocket higher. The stock reached an intraday high of $300 per share in September of that year.
“I think the short sellers lost something like $600 million on that particular day, Sept. 19, 2018, which actually pales in comparison to what I’ve been reading about GameStop,” Kennedy added.
Tilray notched its record close of just under $150 in October 2018, but those massive stock gains did not last. The company’s shares traded around $19 during Wednesday’s session — but they had fallen into the single digits during last year’s coronavirus-driven market plunge.
Shares of GameStop soared again Wednesday, finishing higher by 135%, even as some high-profile short sellers indicated they had retreated from their positions. The video game retailer’s stock is being hyped by investors in online forums on sites like Reddit, causing it to jump from roughly $6 just four months ago to its Wednesday close of $347.51 on Wednesday. That’s a gain of nearly 5,700%.
The GameStop rally has put pressure on short sellers, who sell borrowed shares in hopes of buying them back lower in the future. They return the borrowed number of shares and pocket the price difference.
AMC shares rose 301% Wednesday to nearly $20 apiece. In November, the stock was trading under $3 per share as the movie theater industry continued to be slammed by the coronavirus pandemic.
The company revealed in an SEC filling on Monday that it had raised $917 million of new equity and debt capital since December, which is enough financing to keep the company operating well into 2021.