Jason Mudrick stayed a shareholder in cinema chain AMC Entertainment for about as long as it takes to screen Titanic. And for the cinema company, that may have been an acceptable outcome. The US investor’s firm, Mudrick Capital, acquired a $230m stake in the theatre chain, a transaction announced early on Tuesday.

By midday, Mudrick was out again. He may have netted a 10 per cent to 20 per cent gain, judging from intraday prices.

The crucial point is that he bought the shares from AMC itself. This announced it would go on “offense”, using the capital to buy cinemas crushed by the pandemic.

The stock has nearly tripled in recent weeks on the strength of meme-driven frenzy. The company has no material news. And no objection to topping up its capital.

Large shareholders such as Silver Lake and Dalian Wanda — and, of course, Mudrick — have sold out recently. In their place are 3m retail investors pushing equity value to its highest level for four years.

For a time, it seemed AMC would be bankrupted by heavy debts and shuttered theatres. But more than 20 financings have brought in $4bn of liquidity. America has quickly reopened after a mostly successful vaccine rollout. Studios are releasing blockbuster films such as Godzilla vs. Kong.

Financial results that match 2019 are unlikely in 2021. The company’s $5bn debt load is higher than two years ago. A flurry of equity offerings has quadrupled its share count.

Yet a compelling narrative can overcome such plot holes as the towering implied valuation multiples AMC now trades at. Even after Mudrick sold shares, AMC’s price hardly dropped.

The trade raises some ticklish questions over the impact of corporate announcements on the price of stocks which become the subject of big block trades. The bigger issue for meme traders — both small and large — is how long exuberance will last as inflation expectations rise.

A few film franchises are evergreen. Most flop when the juice has been squeezed from them. That can apply to investment gambits too.

The Lex team is interested in hearing more from readers. Please tell us what you think of Mudrick’s quick flip of AMC stock in the comments section below.