Cramer says AMC pop reflects 'brilliant' CEO moves, sees buyouts as a way to justify valuation

Published Wed, Jun 2 20211:36 PM EDTUpdated Wed, Jun 2 20214:05 PM EDT

CNBC's Jim Cramer predicted that AMC Entertainment could be gearing up to buy a rival movie chain as its shares nearly doubled by the close on Wednesday. Heralding CEO Adam Aron's business moves, Cramer suggested that Cinemark or Imax could make good make acquisition targets for AMC. "[Aron] has shares that he can offer to be able to really buy pretty much any theater in the world, or any chain, and I think he's going to do that," the "Mad Money" host said. "Adam is a fantastic manager, but what he really knows how to do is run a stock and it's simply brilliant." Taking a break from his vacation, Cramer called into CNBC's "Tech Check" just before noon ET to react to the AMC buying frenzy, which at one point gave the company a stock market value north of $30 billion. Shares hit an all-time high of $72.62 each during the session after several trading halts on heavy volume. The stock closed Tuesday at $32.04. It closed at $65.55 the next day, giving it a run of 2,5717.45% year to date. "AMC is fascinating," Cramer said. "It's obvious that this is one of those where the sellers have just had to go away because [the buyers are] taking it higher." Cramer's comments came after he fired off a series of tweets in the morning, warning that the ballooning AMC share price was unsustainable unless Aron seeks to acquire a competitor. AMC, Cinemark and Imax were not immediately available to respond to CNBC's request for comment on Cramer's speculation. Shares of AMC, a favorite among Reddit traders, was rising after the movie theater chain said Tuesday it sold 8.5 million newly issued shares to Mudrick Capital . The distressed debt firm, however, subsequently dumped its shares in AMC to turn a profit on the purchase, Bloomberg News reported . Despite this, the appetite for AMC did not subside. The share issue was a part of a string of moves the company has made to raise capital. While he considered the stock to be overvalued, Cramer said the rally has him fired up, noting that so-called meme traders are on a mission. "They're bent on some sort of contest where they want to destroy the shorts and anybody who says it's overvalued is immediately a target," he added.

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CNBC's Jim Cramer predicted that AMC Entertainment could be gearing up to buy a rival movie chain as its shares nearly doubled by the close on Wednesday.

Heralding CEO Adam Aron's business moves, Cramer suggested that Cinemark or Imax could make good make acquisition targets for AMC.

"[Aron] has shares that he can offer to be able to really buy pretty much any theater in the world, or any chain, and I think he's going to do that," the "Mad Money" host said. "Adam is a fantastic manager, but what he really knows how to do is run a stock and it's simply brilliant."