AMC Entertainment’s Short Score is Now at 95

AMC Entertainment’s (NYSE:AMC) short score is now at 95 as reported by Global Financial Analytics firm, Ortex.

According to Ortex, ‘Short Score’ uses a multi-factor model that incorporates multiple short-related metrics, with a higher score indicating that the stock is heavily-shorted and has other characteristics that increase the possibility of a short squeeze occurring.

AMC Entertainment was able to squeeze short sellers twice in 2021; first in January and then again in June.

However, short interest amongst Wall Street has not wavered which means a short squeeze is still very much possible today.

AMC’s current short interest is sitting at 22.50%, around the same short interest the company had in 2021 when shares exploded between $6 -$9 per share to its all-time high of $72 per share.

The analytics firm has also listed the world’s largest movie theatre chain on its top 10 list of most likely ‘short squeeze candidates’.

But Ortex isn’t the only firm alerting short squeeze signals from AMC Entertainment.

“As the broader stock market has been on a tear for about a month, things are looking grim for investors with big short positions in stocks like AMC Entertainment Holdings Inc. and GameStop,” said Ihor Dusaniwsky, head of predictive analytics at financial technology and analytics firm S3 Partners.

“One factor that is also killing profits for short sellers is the borrowing costs on stocks that no one is willing to part with,” he continued.

Short sellers paid $1.91 billion in short borrow fees during the first quarter of 2023, according to S3 Partners.

So far, AMC’s cost to borrow has surged passed 1,000% in both April and July this year.

Will AMC Entertainment Squeeze?

Based on financial analytics from data firms such as Ortex and S3 partners, the signals certainly point towards the possibility of an AMC short squeeze this year.

Today’s high box office numbers are indicating big growth for AMC Entertainment as revenue nears pre-pandemic levels.

Box Office Mojo reports more than$2.2bn in gross revenue for the second quarter of 2023 alone.

That’s more than Q1 box office numbers at $1.7bn.

“Our results for the first quarter of 2023 represent AMC’s strongest first quarter in four full years.

We kicked off 2023 by continuing on our positive glide path to recovery, with more than a 21% growth in total revenues and a $69 million improvement in Adjusted EBITDA compared to the previous year.

The first quarter of 2023 and fourth quarter of 2022 mark the first two consecutive quarters of EBITDA since March of 2020.

This progress is a testament to the ongoing recovery in the industrywide box office, as well as AMC’s enduring commitment to the excellence and innovation as our guests enjoy a superb movie-going experience at our theatres,” said AMC CEO Adam Aron.

“Road to recovery getting better with box-office strength,” said Macquarie Research analyst Chad Beynon.

“Overall, AMC is highly optimistic about film volumes recovering to pre-pandemic levels over the next few years, supported by growing theatrical aspirations from the likes of Amazon and Apple,” he continued.

But I’m curious to hear your thoughts on this — will AMC squeeze this year, or do you think the narrative has changed to a more fundamental one?

Leave a comment down below.

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