FAST FIVE: "Shot Themselves In The Foot" – AMC 'Messiah' Mudrick Battered By Bad Options Bet
One Reddit post summed up their attitude to the fund's quick profit.
But now, as The Wall Street Journal reports, things didn't work out quite as well as Mudrick hoped and Redditors will get some schadenfreude payback.
It turns out that inside Mudrick, executives were growing apprehensive and the firm's risk committee met on the evening of June 1 and decided to exit all debt and derivative positions the following day (only the cash equity position had been exited prior).
The derivatives gave buyers the option to buy AMC shares from Mudrick Capital for about $40 (viewed as a seeming improbability when the stock was trading below $10).
In overnight trading, AMC started to accelerate above $40.