AMC Entertainment (NYSE:AMC) stock is up more than +40% this year-to-date.
New developments this year may send share prices rising throughout 2023.
Streaming giants have figured out that the theatrical experience is key to their long-term success.
AMC Entertainment CEO Adam Aron praised Disney for scheduling Stephen King’s ‘The Boogeyman’ to be released theatrically on June 2nd, 2023.
The film was originally planned to be released on the streaming service Hulu.
“Theatres beat streamers! We salute producer 21Laps and our friends at Disney for this decision. The Boogeyman, a Stephen King adaption, was made for Hulu. But it tested so well, Disney is releasing it theatrically instead. Thank you Bob Iger, Alan Bergman, Justin, Tony, and Ken,” said Adam Aron on Twitter.
On the other end, CNBC says Netflix left $200 million on the table for not leaving Daniel Craig’s ‘Glass Onion: A Knives Out Mystery’ in theatres longer.
So, what does this say about the Wall Street short thesis that movie theatres are dead?
Here’s the latest AMC Entertainment stock market news.
Online Streaming Might Not Be What Wall Street Hoped For
Glass Onion: A Knives Out Mystery starring Daniel Craig was released in the U.S. as well as the UK, Ireland, Italy, Germany, and Spain.
CEO Adam Aron stated on Twitter that success here could lead to more Netflix (NASDAQ:NFLX) movies at AMC.
The film earned $15 million at the box office but CNBC says the showing could have made $200 million if it had been kept in theatres longer.
The sequel to Johnson’s popular “Knives Out” opened in nearly 700 theaters, the largest release of any Netflix original film to date, 200 of which were AMC Entertainment theatres.
Unfortunately for the online streaming platform, hundreds of millions of dollars were left on the table.
Box office analysts say Glass Onion could have earned much higher earnings if Netflix had opted for a traditional wide release of 2,000 to 4,000 theaters.
What Are Experts Saying?
CNBC stated, “Netflix has backtracked on its previous policies, including by introducing an ad-supported subscription option, leading many to wonder whether the company should rethink its resistance to the traditional Hollywood movie release model as it looks for new ways to grow revenue. “
The movie theatre industry is no longer struggling to attract movie lovers back to the big screen.
While pandemic lockdowns threatened the existence of thriving cinemas, rapidly growing numbers of attendees have continued to grow over the past two years.
The only thing movie theatres are missing is more movie titles, says CEO of AMC Entertainment Adam Aron.
As “Avatar: The Way of Water” gets closer to the $2 billion mark at the worldwide box office, James Cameron says it’s a reminder that moviegoers still value the theatrical experience in an era of streaming dominance.
“I’m thinking of it in the terms of we’re going back to theaters around the world. They’re even going back to theaters in China where they’re having this big COVID surge. We’re saying as a society, ‘We need this! We need to go to theaters.’ Enough with the streaming already! I’m tired of sitting on my ass. Source:Variety.
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SEC publishes Meme Stock Video
If you haven’t watched the SEC meme stock video, it’s embedded below.
The SEC published the video on their official YouTube channel where they restricted public commenting.
Former SEC Branch Chief Lisa Braganca said she was “very disappointed to see the SEC disparage investors in meme stocks as if they must have done it thoughtlessly – especially when the SEC permits most trading to take place in dark pools.”
She then tweeted, “how about a video on dark pools Gary Gensler?”
Lisa Braganca is an activist who fights for market transparency.
She’s talked on Matt Kohrs’ channel before and has done an AMA on Reddit’s r/Superstonk answering questions about self-regulatory regulations, SEC regulation, and SEC enforcement.
Gary Gensler admitted in a Bloomberg exclusive 90%-95% of retail orders don’t go through the lit exchange but failed to mention a solution to the problem.
In an interview with Jon Stewart, the SEC Chairman fails to deliver a quality and productive discussion on solving the problems in the market.
Jon Stewart described Gary Gensler as a sheriff in town that allows blatant corruption to occur.
For Gary, it’s clear it’s more about keeping the job rather than creating a legacy.
The SEC’s meme stock video might try to portray retail investors as young and clueless novice investors.
But that’s far from who the retail community is.
Retail investors outsmarted hedge funds, exposed the corruption in the SEC, mainstream media, and are now attacking with this propaganda.
It’s a sign of weakness.
The retail community is made up of a very diversified group of people all fighting for the same cause.
And this is a threat to corporate media and powerful institutions.
Republicans and democrats getting together to fight for market transparency, what!?
But this isn’t just about the left and right getting together to combat corruption, it’s a global movement – and opps (opposers) don’t like this.
Trey made a great point when he stated why doesn’t the SEC tackle the problems that created meme stocks in the first place:
Off exchange trading
Retail investors must continue to raise awareness of these issues despite the propaganda.
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AMC Issues Strong Short Squeeze Statement
I’ve touched topic on the warning AMC released for shareholders below as the company prepares to sell up to 425 million APE shares.
“Under the circumstances, we caution you against investing in our AMC Preferred Equity Units, unless you are prepared to incur the risk of losing all or a substantial portion of your investment,” said an official statement from AMC Entertainment.
However, the company also warns short sellers of a potential APE short squeeze, resulting in severe losses for those betting against the security.
“purchasers of our Class A common stock and AMC Preferred Equity Units could incur substantial losses if there are declines in market prices driven by a return to earlier valuations; to the extent volatility in our Class A common stock and AMC Preferred Equity Units is caused, or may from time to time be caused, as has widely been reported, by a “short squeeze” in which coordinated trading activity causes a spike in the market price of our Class A common stock and AMC Preferred Equity Units as traders with a short position make market purchases to avoid or to mitigate potential losses, investors purchase at inflated prices unrelated to our financial performance or prospects, and may thereafter suffer substantial losses as prices decline.”
In this passage here, AMC is warning both retail investors and short sellers alike of what a short squeeze could muster.
The losses for short sellers could be grand as coordinated trading activity causes a major spike in price.
For retail investors, buying the spike could cause significant losses as the stock enters a cooldown period.
What AMC is accepting though is the possibility of a short squeeze whether it be AMC or APE shares.
What Will Trigger a Short Squeeze?
According to AMC’s statement, a short squeeze is triggered by coordinated trading activity, resulting in share price spikes.
Volume was key in January when AMC surged to $20 per share, it was key when the stock skyrocketed to $72 per share in June, and it will be the key today.
The bear market is pinning stocks, but as the market reverses, it’s very possible we see a surge in trading activity in AMC (and APE) again like we did in 2021.
An AMC short squeeze potential has been a huge debate for retail investors and shareholders amongst the Reddit and social media communities.
Exactly how high an AMC short squeeze could possibly go up to has plagued AMC shareholders since the very first publication of the short interest data (archived data).
AMC Entertainment stock was trading around $14 when I began to share the short interest data after shooting up to $22 per share during its first big push from $2.50.
The stock fell back down to $5 per share but the short interest told a story, which is why I continued to share it, because retail investors had a shot at something big here.
Four months after my publications, AMC reached its all-time high of $72 per share.
I knew investors that were up thousands of dollars, and others that were up hundreds of thousands of dollars.
Another community member posted his brand-new Polestar.
You can actually go and see their comments on my Instagram highlights under ‘Gains‘.
But what’s more interesting is that AMC never shot up to its potential, did it?
In this article, I’m going to go over AMC short squeeze price predictions along with some TA on key levels the movie theatre chain stock will have to break in order to truly reach its potential.
Let’s get started.
AMC Stock Price Today
Today, AMC stock is trading around $3-$4 per share, respectively.
Shares rose to $8 in December before rejecting and coming back down to roughly $6 and eventually to current share price levels.
2022’s bear market dragged many companies down, and AMC Entertainment Holdings Inc. was no exception.
And with talks of a recession creeping in this year, it’s difficult to determine whether prices will stagnate or bounce back soon.
While a short squeeze does not discriminate whether we’re in a bear market or bull market, it’s heavy buying pressure that will ultimately trigger it.
And while AMC’s trading volume hasn’t been anywhere near 2021’s levels, it doesn’t mean it can’t be later this year.
How High is An AMC Short Squeeze Predicted to Go?
There are many AMC short squeeze price predictions from the retail community.
One of the biggest price predictions being $1,000.
In the past year, some would have laughed at you for your lesser capability to see beyond.
More ambitious short squeeze predictions say AMC can reach upwards of $10,000 per share!
Then of course, you have the strong big D energy ‘apes’ that say an AMC MOASS (mother of all short squeezes) will yield $100,000-$500,000 per share.
All fascinating without a doubt.
You might ask, what in the world led retail investors to believe such impossible numbers could be possible to begin with?
The truth is, while hypothetical, these numbers (technically speaking) may be possible.
See, what happened was that wrinkled brain apes from the Reddit community began to experiment with a series of predictions based on the number of naked shares circulating outside the original (and legal) float.
Redditors began to create brackets of equations to identify what (potential) share prices could look like if hedge funds (hypothetically) closed billions upon billions of ‘synthetic shares’.
What did we find?
Denial. Over and over again.
Mainstream media and Wall Street bullied the retail community into a corner and said naked shorting no longer existed.
Retail investors were called conspiracy theorists.
Naked shorting later proved to be the highest probable outcome for an incredible amount of FTDs (fails-to-deliver) in AMC.
CNBC’s Melissa Lee and FOX Business’s Charles Payne eventually began to touch topic on the matter after Trey’s Trades addressed retail’s concerns on interviews.
Naked shorting was now officially being discussed on live television.
But Wall Street kept pressing, denying the existence of dark pools, exchanges used to essentially suppress the price of security or to refrain from the full demand of a stock to reflect its actual share price.
In February of 2022, SEC Chairman Gary Gensler said in an exclusive Bloomberg interview that 90%-95% of retail orders are not processed through the lit exchange but rather through dark pools.
In an interview later in December, the Chairman told ‘We The Investors‘ that he understands retail’s frustrations.
The SEC Chairman was asked if dark pools suppressed the price of stock and whether retail investors could influence the price of a stock if majority of orders traded in the lit exchange.
While there was no direct answer to the suppression of price, the Chairman says that with so much trading happening off-exchange, he doesn’t think it’s a leveled playing field as dark pools give institutions an unfair advantage.
So far, there has been no ‘official confirmation‘ of ‘synthetic shares’ to back up the highest AMC short squeeze predictions.
There’s only been denial.
What’s an AMC Short Squeeze Potential Factoring Out Synthetics?
I’ve shared this equation in the past and the prediction is not accounting for synthetics.
When AMC surged to $72 per share, its short interest had dropped from 22% to 14%, an 8% difference.
Now, while there is no sure way to identify how large positions are per percentage drops, we can gain a little more clarity by analyzing these proven numbers.
Is it probable that if AMC’s short interest had dropped another 8% from 14% down to 6%, the stock would have surged twice its all-time high of $72 per share to $144 per share?
Sure – although not 100% certain, we can begin to see a clearer picture here.
Could we then predict an AMC short squeeze potential to peak between $100-$200 as a rough estimate?
At these numbers, every shareholder (even late buyers) will be in profit.
Having reached $72 per share, it’s fair to say $100-$200 per share is a fair short squeeze potential when you exclude the existence of synthetics.
Some may agree, others will certainly differ.
But if there’s a hard lesson I’ve learned as an options trader, it’s been to never get too greedy when you’re already in profit.
Are Shareholders Still Holding AMC?
There’s been some controversy recently within the community surrounding the CEO.
There are shareholders who criticize Adam Aron for cashing in more than $40 million between late 2021 and early 2022 while shareholders held in order to prevent shares from sliding.
Others are happy to hear the CEO has no interest in selling shares any time soon and has rejected a pay raise for the new year.
Despite the controversy, majority of shareholders continue to hold their stock.
So far, more than 90% of shareholders say they continue to hold their AMC shares in 2023.
I will update the numbers as more investors continue to participate.
Still, some argue that those who voted ‘no’ may have never been shareholders in the first place.