What Is Going On With AMC Entertainment?
I’m sure you’ve heard the news:
Defying all forms of fundamental analysis and business logic, AMC Entertainment (AMC) once again finds itself climbing higher.
AMC is up 200% advance since last week and almost 3,000% since the beginning of the year.
This is another coordinated short squeeze event by retail investors — especially the users of the Reddit Forum /WallStreetBets or “Apes” — as they call themselves.
Back in January, AMC Entertainment (AMC) and fellow Meme Stock, GameStop (GME), were the focus of an attack on institutions and hedge funds that held substantial short positions in the stocks.
“Being short” means that the investor believes that the price of the stock will fall and that the underlying business does not deserve its current valuation.
A short squeeze occurs when the price of a stock climbs and goes against the short position, forcing the short sellers to buy existing shares to “cover” their positions.
When a stock has an unusually high short percentage, like AMC and GameStop, investors can actually force the price to go higher by buying up shares at the current price.
