It was December of 2021. I had COVID and was on the verge of being officially diagnosed with prostate cancer. Things were pretty bad and suddenly got worse: I noticed “Fire Gasparino” trending on Twitter — not because I had made up a story, or defamed someone.
My “sin” was reporting, repeatedly and accurately, that an investment cult had formed across the stock of the troubled movie show chain often called AMC, pushing its shares well above where they ought to be. And like most cults, this one wouldn’t end well.
The abuse lasted through Christmas. I assume I could have wilted and joined a few of my colleagues in heralding the small investor-led movement across the stock as something biblical. David slays Goliath.
I didn’t and kept reporting the story behind one of the absurd and now costly stock pumps in recent history.
Nowadays, I’m glad I did.
Yes, I survived COVID, my cancer diagnosis and getting vilified by a Twitter mob just high-quality. Actually higher than high-quality due to what happened next: The stock imploded as I reported it could. AMC was burning a great deal of money, heading for bankruptcy or massive dilution to boost much-needed capital, neither good for shareholders.
Shares are down 95% since December 2021. About 10 days ago, the stock’s crash and burn was complete as the corporate took concrete steps toward the issuance of a ton of recent shares (aka diluting existing shareholders) and stay out of bankruptcy. Were it not for a bit of economic alchemy in a 10-for-1 reverse stock split, AMC’s stock price can be reading just above $1.
“Barbenheimer” was a commerical boon for AMC. AP
I’m not taking joy in people losing money but in people saving some. Anyone who followed my reporting on AMC saved themselves some real money. Those that followed cultists, the self-described AMC Apes or the cheerleading pseudo-journalists are paying the value.
Phil Graham, the sensible but troubled former publisher of The Washington Post, got here up with the truism concerning the career of journalism as being the “first rough draft of history.” That was back within the early Sixties before he killed himself in a fit of depression.
I’m wondering what Phil Graham would call what goes down on the rebranded Twitter site X or any of the opposite instantaneous social-media feedback loops which can be now competing with real reporting. A very, really, really rough draft of history?
A ‘breeding ground’
Social media is great in so some ways. Yes, it’s a draft of history, even when it’s really rough, and that usually serves a purpose through the exchange of ideas to make an informed judgment. It’s also an outlet for people desperately trying to find purpose, and while they’re at it, indulging of their worst instincts and behaviors. It’s a breeding ground for the cult.
How cults are created is an age-old query. The result’s deadly and near deadly stuff like Jonestown and Pizzagate — and the financially deadly stuff that surrounded the stock of AMC. The weird notion that a cabal of greedy hedge funds, hell-bent on destroying the nation’s largest movie show chain, were shorting the stock (betting its price would collapse) in dark corners of Wall Street does seem appealing.
That average people could buy this stock, and destroy a bunch of nasty hedge funds while becoming wealthy, much more so.
Only one problem: Nothing near what the cult was blathering about was true. The “evidence” of this scheme thrown around Twitter or the Reddit message boards was of the wackadoo variety. And If you happen to dared query the illogic, as I did, be prepared for harassment such as you’ve never seen before.
Taylor Swift’s Eras Tour movie is anticipated to be one other hit for AMC.Getty Images for TAS Rights Management
The ability of social media is intense and crazy, after all, and it made this cult particularly nasty and resilient over the past two-plus years. That’s until the hammer finally fell just days ago and the AMC cult ended like all of them do — in disaster.
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It’s a shame more reporters didn’t call this out. It was so obvious based on what yow will discover on a balance sheet. Short sellers made a whole bunch of hundreds of thousands of dollars in August because AMC’s funds included massive money burn, numerous debt and movie attendance that as a result of streaming hasn’t returned to pre-pandemic levels.
CEO Adam Aron, not exactly a short seller, recently explained AMC’s situation in a call with analysts. Business is recovering — “Barbenheimer” was a box office hit; a Taylor Swift film coming to AMC theaters in October is crushing it in pre-sales. But he said that if he can’t raise money by selling more stock, Chapter 11 is nearly inevitable. He recently beat back an Ape-inspired lawsuit difficult his dilution plan, because they imagine AMC is admittedly doing just high-quality and doesn’t need the cash.
It does, after all, and the approaching dilution is why AMC, for now, and possibly for the foreseeable future, continues to be in business, at the same time as its stock is battered and bruised.
Among the Apes are still “HODL” (“holding on for dear life,” within the lingua franca of the cult), and still attacking those they see as backing the evil hedge funds. That’s scary.
Much more scary: Far too many reporters over the past three years sought the cult’s approval since it feels good to be applauded on social media. It also helps you construct your followers, which can be idiotically vital to reporters nowadays.
They’re truly sellouts to the career, because they need to know, based on the history, cults never end well.
