Robinhood (NASDAQ:HOOD) appears to have made a major blunder. Yesterday, the financial services company briefly posted an incorrect news banner for about three minutes, showing that AMC Entertainment (NASDAQ:AMC) had filed for bankruptcy. AMC CEO Adam Aron quickly caught wind of the news and voiced his disapproval on Twitter:
I am so Ducking angry about this. They are either incompetent or evil, and either is absolutely inexcusable. Obviously, there is no truth to their postings. Outrageous behavior. I have already asked our lawyers if we can sue the Dastards. #IncompetentEvil https://t.co/HhNswuPeaU
— Adam Aron (@CEOAdam) May 1, 2023
The false news did not seem to have a major effect on AMC stock; shares are up about 5% this week. However, Robinhood’s mistake could have had an effect on AMC if the news had been posted for longer. Robinhood attributed the error to a “technical issue leading to an incorrect banner being applied to AMC.”
Aron later issued another tweet in the form of a poll, asking followers whether or not to sue Robinhood. At the time of this writing, about 95% of participants voted for “Sue the ‘dastards.'” The remaining 5% voted for “Let ’em slide.”
AMC Stock: CEO Adam Aron Blasts Robinhood for False Bankruptcy News
It’s not exactly clear who was responsible for yesterday’s blunder. Robinhood posts its own news, but it also routes news from other sites. Based on Aron’s response directly to Robinhood, though, it appears to be responsible. Aron also teased AMC’s first-quarter earnings report slated for Friday by saying AMC would soon disclose its “sizable cash position.”
For the quarter, analysts are forecasting revenue of $938 million, which would imply yearly growth of 19.35%. Furthermore, the theater chain is expected to post an adjusted EPS loss of 17 cents. That would mark an improvement from the loss of 65 cents a year ago. Profitability still remains an issue, however. Net loss is expected to be $206 million for Q1 2023, down from $337 million in Q1 2022.
Following earnings, AMC shareholders will have another date to mark on their calendars. Delaware’s Court of Chancery is expected to schedule the settlement hearing concerning the conversion of AMC Preferred Equity Units (NASDAQ:APE) into AMC stock on June 29 or 30.
“I’m open to getting this wrapped up by the end of June,” said Vice Chancellor Morgan T. Zurn.
On Penny Stocks and Low-Volume Stocks: With only the rarest exceptions, InvestorPlace does not publish commentary about companies that have a market cap of less than $100 million or trade less than 100,000 shares each day. That’s because these “penny stocks” are frequently the playground for scam artists and market manipulators. If we ever do publish commentary on a low-volume stock that may be affected by our commentary, we demand that InvestorPlace.com’s writers disclose this fact and warn readers of the risks.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.