Yahoo Finance’s Myles Udland, Brian Sozzi, and Julie Hyman break down how the meme stocks are trading this morning.

Video Transcript

JULIE HYMAN: Just under four minutes until the opening bell here this morning and we are watching stocks that are pointing to a higher open. Guess what's on our watch list once again this morning, the meme stocks. AMC is leading the gains here. And there's actually some fundamental news once again that we can watch. AMC on their ways in raising cash once again. This time they are selling shares to Mudrick Capital Management, 8 and 1/2 million shares. They're selling them at $27.12 apiece, so raising about $230 million in new cash here. And basically, they say they're going to go on offense with acquisitions.

Now Mudrick has an interesting history at this point with AMC. This is a management firm that has made a lot of money off AMC and GameStop I guess you could say. And there is sort of this irony here that the meme stocks are known as the Reddit stocks, the Wall Street bet stocks, and here is a hedge fund that has done quite, quite well in that area. But I guess that irony has been around as long as we've been talking about these meme stocks. But Myles, I know that you have been watching the whole meme stock phenom very closely, and it is sort of interesting how we get this circularity, particularly with AMC as it benefits from its meme stock status to raise cash.

MYLES UDLAND: I mean, it's really the only option for a management team. I mean, this is why GameStop is going to have a new CEO in a couple of months here, because I understand that it might feel odd or might feel unsavory let's call it, to go out and issue a bunch of capital when your stock has run up because it's an internet in-joke, but Sozzi, it is the only responsible thing to do as a fiduciaries is to tap the markets.

Now AMC found a specific partner with which to tap the markets. They're not going to the market. They found one person who will buy all of the stock that they've registered to sell at a specific price, which is now I think $4 bucks below where it's trading in the pre market. But there comes a point at which I mean again, it might be a joke, but your cost of capital has gone down dramatically as a result of this, and you as the CEO, have to go to market with new equity. It's the only choice here.

BRIAN SOZZI: Myles, speaking of the CEO, a fun tweet from the always colorful AMC CEO Adam Aron this morning said quote, "In our view, this is not mindless dilution, but rather this is very smart raising of cash so that we can grow this company. To many of you on Twitter, to grow your company." Capitalized your. "Watch out naysayers, AMC is going to play on offense again. Here we come!" Exclamation point.