Mudrick Capital takes massive hit on AMC shares as short bet backfires
NY Post
A big hedge fund’s complicated mix of bets on shares of AMC Entertainment has reportedly backfired, spurring a loss that tanked its value by 10 percent.
Mudrick Capital – which made a tidy profit earlier this month for purchasing $230.5 million in AMC shares then selling the entire stake just hours later, saying the stock was “overvalued” – took the painful loss because of a series of bets it had also made against the company, according to a Wall Street Journal report. Before Mudrick bought into AMC, the fund hedged the purchase with a number of call options — a type of derivative that gave Mudrick a “short” position in AMC stock. But after Mudrick sold the 8.5 million shares, it failed to exit its short position, according to the Journal, which cited unnamed sources.More Related News
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