![]() They had their way for years until the so-called AMC Apes got involved. Hedgies, the conspiracy goes, take it a step further by magically creating fake or synthetic shares that put enormous downward pressure on the stock. In a regular short sale, a trader borrows a stock, sells it, then (hopefully) buys the stock at a lower price to return to the lender. The AMC cult begins with an odd theory that shares are secretly controlled by a cabal of evil hedge funds that want to put the company out of business by illegally shorting the stock. What we have in the AMC imbroglio is a mania fueled by a cult-like conspiracy theory that is causing damage far beyond a few warped souls losing their shirts. Yes, there have always been manias in the markets, but this one is different. To follow the market travails of AMC Entertainment, a money-losing movie theater chain, is to come to terms with the phenomenon of how mass psychosis has taken over stock investing. Affirmative action SCOTUS case could take down 'diversity' industry tooĭodgers inviting Catholic-offending, trans-queer group to Pride Day is latest MLB errorĬhina goes for 'broker': Digging into the possible concern over stock-trading appsĭisney isn't killing Florida jobs over Ron DeSantis - but to save itself īret Kenwell is the manager and author of Future Blue Chips and is on Twitter. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines. On the date of publication, Bret Kenwell did not have (either directly or indirectly) any positions in the securities mentioned in this article. However, if investors opt not to trade AMC, I certainly can’t fault them. For the moment, AMC’s charts remain bullish and I won’t fight that momentum. In the case of AMC, I will default to the technicals. However, we’re in an era where valuations don’t matter for certain stocks. By traditional standards, most investors would also consider AMC stock overvalued. The stock has never traded for the type of sales multiple it has now. AMC also isn’t forecast to be profitable this year or next.ĭo these observations, combined with the fact that AMC stock trades with a $26 billion market capitalization, make AMC overvalued? However, that would still be shy of the $5.4 billion in sales that AMC did 20. If those estimates come to fruition, AMC should do about $4.56 billion in sales next year. In 2022, estimates also call for a 90% boost in revenue. As such, analysts expect a 93% rebound in revenue this year. Breaking Down AMC EntertainmentĪMC Entertainment is seeing a massive rebound in its business as consumers flock back to theaters. While we don’t know what it would be - or if it will even come to fruition - a partnership between AMC and GameStop could trigger another one of these Reddit Rallies. Instead, I’m curious about the rumors floating around between AMC and GameStop working on a potential partnership. GameStop recently reported earnings, and while the stock is trying to work off its decline, I’m not focused on the results. There was no real or meaningful news to get it started. The moves come in a hurry - they’re violent and they’re unpredictable.įor example, in late August GME stock erupted 36.5% at its highs in a single day, while AMC stock jumped 31% at its highs. Whether it’s AMC, GameStop (NYSE: GME), BlackBerry (NYSE: BB) or something else. ![]() It’s hard to ever rule out a Reddit Rally hitting these short-squeeze candidates. It also saps some of the stock’s bullish momentum. On the downside, failure to hold $48 and the 10-day moving average puts the 21-day moving average and $40 on the table. If AMC clears $56, the $60 resistance area is in play, followed by the high near $72.50. Above $50 could put the 61.8% retracement near $56 in play. As long as AMC can stay above $48 and the 10-day moving average, it’s okay on the long side. We now have a breakout over $48, as AMC stock contends with $50.
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