If you’ve been following the stock market news you’ve probably heard of all the hype surrounding AMC stock and GME (GameStop).
It wasn’t long before traders flocked over to AMC after the massive gains GameStop yielded due to the high percentage of shorting within the stocks.
Shorting a stock is the process by which sellers essentially bet on the stock price to drop.
They borrow stocks at higher cost, sell it, and buy back the stock low, profiting the difference.
Well, investors over at r/wallstreetbets found that by purchasing stocks at low price in heavy volumes it would drive a short squeeze.
A short squeeze occurs when a stock jumps sharply higher, forcing short sellers to buy higher, causing them to lose money.
Lots of it.
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Will we see a squeeze with AMC?
There are numerous news that lead traders and investors alike to predict an upcoming short squeeze like we saw with GME (Gamestop).
- CEO of AMC announces AMC is no longer going bankrupt (via. Los Angeles Times)
- Vanguard, Wells Fargo, BMO Harris, BlackRock, Fidelity and many more institutions are buying AMC stock while it’s low (via. CNN Business)
- AMC is heavily shorted, with more than 22% short interest.
- AMC is also currently one of the most held stocks surpassing Apple (AAPL) and Tesla (TSLA) (via. Nasdaq)
- More publicity and awareness has average people investing in AMC which is driving volume for a potential squeeze
Related: 93% of AMC Shareholders Say They're Holding This Year
Retail investors keep buying AMC stock
We’re seeing retail investors continue to invest in AMC stock while it’s affordable.
And because it’s affordable, we’re also seeing average people invest in this stock.
As long as the stock is being held, though lows and through highs, a squeeze like we saw with GME (GameStop) is certainly possible.
AMC stock closed at $6.08 on February 2nd.
The stock has been on discount.
However, the community sentiment remains bullish meaning retail investors keep buying and holding the stock to squeeze shorts from their positions.
Shorts continue to short ladder the stock causing the downtrend we’ve been seeing for over two years now.
But AMC wants to keep climbing.
As long as AMC shareholders continue to hold and buy the dip, short investors are at a disadvantage.
Great news for AMC Entertainment (Archive Data)
News from 2021 helped drive AMC stock prices up momentarily when AMC Entertainment announcement that most AMC theaters had begun to reopen.
AMC’s cost to borrow the stock today is 213%.
The fee is going up after being down for many months.
What is AMC cost to borrow?
The cost to borrow fee is the interest shorts pay for borrowing shares of AMC stock.
This means shorts are losing money every day by not closing their positions.
A surging short borrow fee rate could incentivize shorts to close their positions due to higher borrowing costs.
Why does the cost to borrow rate matter?
It costs shorts interest to hold while it costs the retail investor absolutely nothing to hold.
Shorts are losing money month they hold because of this interest fee for borrowing the stock.
For some reason shorts still think AMC Entertainment can go bankrupt, although they have enough money to continue doing business.. I know, I don’t understand this either.
As hedge funds like Citadel lose money, the short borrow fee only increases those losses.
AMC’s share price might be on discount right now, but hedge funds are experiencing losses on top of losses.
They’ll eventually have to close their short positions; will you miss it?
Related: AMC’s Cost to Borrow Has Hedge Funds Burning $30 Million Per Month
How high can AMC stock go up to?
Because we’ve seen a lot of suppression in the market, many traders are anticipating AMC stock can get as high if not higher than GME (GameStop).
This of course is just speculation as both stocks are heavily shorted and more people and institutions alike are buying and holding the stocks.
There’s a notion that all these suppressed gains may result in a massive short squeeze at any moment.
There are AMC short squeeze price predictions ranging from $100 to $1,000, and higher.
Related: How Big Could an AMC Short Squeeze Potential Surge?
So, is it too late to purchase AMC stock?
The price after a short squeeze eventually fall back down and level out, but this will take time.
AMC seems to have bottomed out and begin to bounce back after its incredible climb to $72 per share more than a year ago.
Despite what corporate media is pushing, AMC’s growth tells us the stock is undervalued.
But most importantly, there are plenty of short sellers that have yet to close their positions.
Hedge funds continue to short AMC and the volume is increasing; it’s the perfect storm for a short squeeze.
Trending: Analyst Predicts AMC Free Cash Flow Coming in 2024
Things to expect in the market with AMC
- Volatility followed with an upward trend in price action
- Short-ladder attacks
- Headlines advising you to trade in something else
- Hedge funds to lose a lot of money
- More retail investors buying this stock right now
- A series of gamma squeezes
- And, a highly potential short squeeze that can happen at any time
Related: Are Institutions Preparing to Close Short Positions in AMC?
How many AMC shares should I buy?
If you’re planning on taking a position in AMC Entertainment set a budget for investing.
Since the market is volatile at the moment, purchase shares incrementally.
The best time to buy a stock is when the share price has dipped.
This will allow your investment to see gains when the stock price rises again.
Ladies and gentlemen, the last thing you want to do is to invest more than you can handle to lose.
This advisory must be made.
If you’re holding AMC stock leave a comment below and let me know what a short squeeze would mean for you.
Related: How to Buy AMC Stock (2023 Guide)
Where can I invest in AMC? What’s a good platform?
If you have not opened a brokerage account to begin investing, read how to invest in the stock market (step by step).
While the US investors over at r/wallstreetbets use Robinhood, it’s not available if you live in Canada.
Instead, you can use WealthSimple Trade or InteractiveBrokers
In this post you will see a number of linked platforms that you can check out!
I personally use Vanguard.
Vanguard has proven to be useful, and it has never failed me before.
It is important to note that I am not a licensed financial advisor.
Like many traders and self-taught investors, all speculation is based on educated estimations based on highly reliable analysis, patterns, and documented news charts.
On another note: It would be wise to not invest more than you can afford to lose. In other words, invest money you would be okay with losing for simpler terms.
Avoid bogus headlines from The Motley Fool and other sources
AMC and r/wallstreetbets have been given lots of negative press from the likes of The Motley Fool and other sources; shaming the purchase of the stock.
Fortunately, the AMC community has been backed up by Mark Cuban, Chance the Rapper, and other big names.
Influential outlets with powerful hedge fund partners (institutions who short the stock) have been attacking traders and investors by providing false information wherever they can.
What we’re seeing right now is that the big guys are losing money due to the price of shorted stocks going up.
They will say and do whatever they can to divert the public from trading this stock.
My personal suggestion to you is to not let these sources intimidate you.
Do your research to see how the stock price has been manipulated through bogus headlines and short-ladder attacks.
Not to mention, the complete halt of trading AMC stock by Robinhood.
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Currently holding a solid 300 shares and still buying weekly and biweekly dips . I have my conviction in this play
I too am holding 300 shares (since Jan 2021) and I’ll be honest, I’m deeply regretting not having sold in June 2021 when this was in the 60s and 70s. I’m a disabled widow with chronic illness, sitting on yrs of medical bills and really could have made my life easier had I sold and cleared some of that medical debt. While it would be great to see a return to those levels or higher, I really don’t think it will happen in time to help me. I think it will take more than a few years to even get close to where it was in June 2021. I hold because I don’t really have a choice unless I want to take a loss on 100 of my 300 shares to date anyway given FIFO tax treatment. I could literally die before we see June’s levels again. Btw, I have been and do follow Trey’s Trades since late 2020. Only recently followed here.
Can you tell me when that interview took place? I searched but could not locate. Thank you
What happens to synthetic shares when the short sellers have to buy back “real” shares?
Disturbing how he plugged the vaccines, more than once. Anyone can get and spread the virus, so vaccines are irrelevant to anything reopening at this point. Everything should be open at 100%. Is there anyone who still believes the vaccines stop the spread? I suddenly have doubts about this guy. The super wealthy only care about themselves and their peers, not the little guys.
The vaccine news has to do with business policy.
I’m new to investing and been doing alot of research about the amc stock being similar to the gamestop and the money that can change people’s life…I just found your articles tonight and I love how you try to be super helpful especially in the comment section…I do want to get in on the amc stock for big gains…Is it true all I have to do is buy the shares at the current price $52.94’and just hold until the stock sky rockets up?? Or do I have to buy a special type share that the hedge fund guys owe?? I’m just trying to make sure I’m going about this right so I can get in on this to help my family and I financially….your response would be greatly appreciated
Hi Kasey, thank you for your comment! If I were getting in on AMC for the first time after reading the DD, I would put in enough money to where I’m comfortable seeing it go both up and down. I wouldn’t invest more than I could afford to lose, but I would certainly be generous with my investment after doing some math of where it may potentially go. The process is very simple. We’ve bought the stock and held it for months at the asking price. We’ve refrained from selling at the very first sight of gains and now we’re here. The data at hand shows it can go higher.
Thanks so much for the response I’m definitely going to book mark some of your pushes and look out for updates…I think being so new I was just trying make sure I was taking the correct steps….I keep hearing about these shorts and naked shares…but I don’t think I have any of those, I just bought the stock regular price $52.94 and going to hold, so as long as I do it that way and sale when it goes to a certain point or we start getting updates, I should be able to gain from this?
una acción que puede cambiarme la vida y por eso cada vez que baja compro alguna más👍🏻 y si las noticias quieren desanimarnos , vengo aquí y releo alguno de tus post☺️
Gracias por estar aqui Elena 🤝✨
Riding this rocket so that I can change my son & my mother’s entire life!
Holding! Very well written! Holding to 500K!
To the moon! 🤝
Being completely realistic, how much could the price of the stock go up? I’ve seen figures like $ 100,000 … but they don’t seem realistic to me.
$ 500 would be a realistic figure?
The thing is that mathematically it can go as high as we allow it to. Meaning if retail investors hold it, it creates a supply and demand. I personally think $1K+ is realistic.
100K IS realistic considering there are more than 1 Billion synthetic shares or ‘naked shorts’ that were illegally sold into the market.
As long as the shareholders hold!
Interested in getting in on this tonight. I see it is still the perfect time. But I find it so confusing. Can someone explain to me simply if I buy today, say 20 shares, how do things go after this? I don’t buy the stock like one would buy regular stock though right? You borrow the stock in essence. Would anyone care to try to explain this very simply (short and sweet) in Stockmarket 101 terms to people who are totally lost like me? I am disabled so can only go about $600 (left some extra off the 20 shares for interest) but I don’t want to lose anything. Mostly, I would like to learn how to do this and hopefully make a little money! Anybody up to walking me through the steps please?
Hi Lesley. Thanks for commenting. When you buy the stock all you have to do is hold it, meaning refraining from selling when the price goes down a little bit or up some. Today’s trading day I earned a very significant amount of money. However, I’m holding the stock and refraining from selling until I reach my desired goal. It’s fairly simple.
Thanks Frank! It seems I am just overthinking it here then. I’m about to grab some shares!! I’ll tell you what I have made good on recently. Carnival Cruise! The stock dropped so low, and I had just figured that with everyone being cooped up last summer that when the cruise lines took off, they would do well. I wish I would’ve bought more shares now! The shares have gone up $9 each since I purchased. I’m holding these since I think they will go up more based on the pre-covid averages. Exact same scenario with Six Flags stock which have gone up 5 dollars a share. So I’m holding there too. I just need to do the same with the AMC. I was definitely overthinking this. I’m in though! Crossing my fingers for us all!
I’m also wanting to invest in some penny stocks. I’ve seen some who like them and some who don’t. Lots of research to do there but I think I’ll give it a go. It’s fun! I think it is anyway!
Thanks so much for answering. I’m trying to learn all this as fast as I can and I believe some of the terminology and just it all being so foreign to me is throwing me off. We have to get the little guy (or gal) on top and having a shot again. Corporations and monopolies and our elected officials can’t have it all can they? 😀😀.
Here’s to us all having a great day tomorrow!!
My pleasure Lesley. The community welcomes you. Cheers and congrats on your gains🥂 here’s to many more 🚀
Iv’e boarded the train pretty late at about EUR 15,94 ($19.43) with 1100 shares. I hope it won’t crash anytime soon, else its gonna be disaster for me, can handle only 50% of loss!
I think everyone joining in right now is right on time brother. Welcome 🍿🚀
thank you for the comment, bought and got out with EUR 8,9k profit, was hesitant for after market price change so got out, gonna get right in tomorrow again, fingers crossed
Earned over 5-figures in profit today but holding to the moon 🌙🚀🚀🚀, not selling
fkn awesome! with 5 figures you got enough margin, for me it was tricky with 1100 shares, will go in right off tomorrow when exchange opens
To the moon brother 🤝🚀
Would you mind reading my comment and trying to answer? I am so confused and want to get in tonight as I don’t want to wait any later! And the more people that get in, the better for all right?
Im not expert but my suggestion would be to wait until market opens. Also at the start normally it dips and it can be a scary dip just like it was at the end of the day, but then it gradually recovers and once market opens it just rockets to the moon (atleast thats what is happening with AMC) so just observe for a while how the stock is moving, and if you see resistance or upward momentum, go all in
Also premarket spreak will be high, so you will go negative after buying, better wait for trading volume when you want to enter
I think it is great the Hedgies drove the price down. It gave me time to gather more cash and buy 12k more stock. The Hedgies are brokering my retirement! I love them for it!!
I am going to be later than you! If I can figure things out that is! I am hoping someone replies to my comment and explains it to me. I understand buying stock normally and chancing it going up or down. But the borrowing and the betting against is confusing me!
GREAT INFO, thanks.. I have had 4500 shares since February and looking forward to what is going to happen this year!
Rooting for you brother, 1000+ holder myself.
I bought 12 stocks of AMC earlier this month when it was at $9.89, already starting to go up! Was hoping that it would shoot up after they reopened theatres and such.
Awesome article! AMC very much needs more positive coverage ! Been holding since Jan and also waiting for the squeeze, its coming! I hope only the diamond hands get the rewards we all deserve !
I appreciate that brother – be sure to share this article within the 🦍community. 🚀
Good article – been hodling since January
Thanks brother 🤝 be sure to give it a social share
Got in 7000 shares. I’m thinking short hedges are approaching double-short territory.
Double-short is a term I coined that refers to time evaporation on the huge short position, coupled with the payback costs of funds to buy and sell shares to try to take the steam off of retail advances.
The hedges see losses explode from their shorts, and also their financial resources to fight retail investors.
This is going to be big.
(Note: opinion, not a financial advisor)
Thanks for your comment Gregg. This is definitely going to be MASSIVE.