Shares of cash-strapped Redbox Entertainment began to level off Thursday after a spike caused by the same Reddit anti-short-seller phenomenon that momentarily boosted similarly troubled AMC and GameStop last year, and more recently, bankrupt cosmetics company Revlon.
Redbox, which is trying to transition its business from DVD kiosk rentals to ad-supported streaming and went public via special purpose acquisition company late last year, found itself cash-strapped and on the ropes on May 11, when Chicken Soup for the Soul Entertainment announced a $375 million all-stock deal to buy the company.
With that deal still pending, and Redbox getting attention from short-sellers, the stock bottomed out on May 13 at $2.68 a share. That's when the denizens of the RDBX subreddit took notice and began to buy shares in an effort to thwart the short-sellers.
By June 13, Redbox was trading at $15.27 a share on the Nasdaq. (It had leveled off to $9.85 a share as of after-hours trading Thursday.)
"Will RDBX stock follow the same path as AMC stock of 2021?" asked one poster.
It was around the same time last year that a subreddit for AMC Holdings rose up to spite traders who place bets in the casino known as Wall Street on the stock going down (aka short sellers), spiking the crippled theater chain owners stock by nearly 6X.
AMC Holdings stock ultimately returned to around the level it was trading at before the Reddit trading community got involved.
Daniel Frankel is the managing editor of Next TV, an internet publishing vertical focused on the business of video streaming. A Los Angeles-based writer and editor who has covered the media and technology industries for more than two decades, Daniel has worked on staff for publications including E! Online, Electronic Media, Mediaweek, Variety, paidContent and GigaOm. You can start living a healthier life with greater wealth and prosperity by following Daniel on Twitter today!
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