AMC has been trending downwards since its rise up to $72 per share and now retail investors are wondering, will AMC stock go up?
In a recent article I break down 3 BIG factors that have influenced AMC’s downward trajectory in the past few months.
Although AMC’s share price has been plummeting, the demand for the stock has not.
This key point is going to play a big role in what happens to AMC stock after this bear market is over.
Welcome to Franknez.com – today I want to lay a few key points you should take into consideration if you’re holding AMC stock or thinking of buying it.
Let’s get started!
AMC stock had an incredible year in 2021.
The stock reached an all-time high of $72 per share with only 21% short interest at the time.
Once the share price began to come down, AMC’s short interest had come down to 14%.
Well, AMC’s short interest is back up to 20% again meaning short sellers have not learned their lesson.
Another key point I’m going to discuss below.
Can AMC’s share price still surge?
As we start the new year, AMC’s average daily volume is incredibly high.
AMC has an average volume of almost 43 million with many days surpassing this amount.
It’s more than 15 times that of GameStop’s current volume.
So why isn’t AMC’s massive demand reflecting in the share price?
That’s the question the ‘ape community’ has been asking regulators all year 2021.
Too many eyes are on regulators right now and at some point, some suppression inflicted by hedge funds will have to subside.
And aside from Omicron and Covid news affecting the entire market, AMC’s massive volume will eventually push the stock price up during a correction.
What does this mean for retail investors?
If you’re looking to get in on AMC for a short squeeze, know the risks, but understand that once this stock takes off you will not be able to buy it at these prices again.
Deflating the short interest
Deflating AMC’s short interest like we saw back in January and June means AMC stock will go up significantly higher from its current share price.
Small short covering allowed AMC to reach $72 per share back in June of 2021.
So why can AMC stock still skyrocket?
Despite the heavy buying volume from retail, AMC still has more than enough short interest percentage to squeeze shorts from their positions.
2022 is only the sequel to 2021’s runup.
The reason mainstream media doesn’t want you to know this is because of their ties to hedge funds and private financial institutions.
These institutions are ‘short’ on AMC and GameStop, meaning they’re betting against them.
Pushing propaganda that will feed their narrative is the safest way for hedge funds to derail retail from further buying the stock that could cause them to default.
Hedge funds such as Melvin Capital, Anchorage Capital, Mudrick, & Archegos are out of the game.
Citadel Securities on the other hand continues to be short on AMC stock and seems to be having a hard time weathering this retail storm.
This is why mainstream media will not touch topic on the short interest data that could squeeze shorts from their positions.
AMC Entertainment fundamentals
A short squeeze play has nothing to do with AMC Entertainment’s fundamentals.
The reason being is that retail goes based off of how much shorting there is in the company stock.
Buying the stock en masse (big volume) will cause AMC stock to go up, forcing shorts to close their positions and buy back their shares; triggering a short squeeze.
A short squeeze play does not depend on the performance of the company as a business.
AMC’s fundamentals are not the greatest, the company does have a lot of debt.
However, something mainstream media is not discussing is just how much their debt has gone down each quarter since 2021.
AMC Entertainment’s fundamentals are a discussion I will be touching topic on another blog post very soon so be sure to join the newsletter.
And although AMC still has quite aways to clear their debt, the company has become one of the first to lead crypto innovation and accept payment in cryptocurrencies.
Tesla has now followed by accepting cryptocurrency as a form of payment on their merchandise too.
Debt is the only thing holding AMC Entertainment from being a fundamental buy in the eyes of most in the industry.
AMC Entertainment partnerships
AMC partnered with Chance the Rapper last year for his concert movie release.
CEO Adam Aron announced that they would be working on partnering up with industry leaders for licensing agreements that would allow AMC to provide more of these experiences to their audiences around the world.
Another successful showing was the UFC fight they held in theatres.
The CEO also expressed his optimism surrounding showing highly anticipated sports events in theatres, granted licensing of course.
Retail investors have been specifically waiting for an AMC-GameStop partnership.
A topic Adam Aron teased could be in the works at some point.
AMC theatres released “GameStop: Rise of the Players” on January 28th, earlier this year.
One thing you cannot deny is the community strength and company relationship to its shareholders.
It’s never been seen before.
Do you own AMC stock?
Leave a comment below.
So, will AMC stock go up again?
Based on trader sentiment, community sentiment, and continuous innovation from the company, AMC stock will surge again.
This bear market won’t last forever.
And although the entire market is rather shaky at the moment, there will be a correction.
Hedge funds might have leverage to short the stock, but the people aren’t leaving.
AMC Entertainment will have to focus on growth and revenue if they are to get out of debt in the future.
You can read AMC’s Q1 highlights for 2022 here.