AMC Stock Up 3,000% — WallStreetBets Victorious?

Markus
7 min readJun 4, 2021
Slayer87 via depositphotos.com

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.

From there, it is simple economics: the supply of shares falls as the demand increases, driving the price of the equity higher.

TradingView.com

Just exactly how much have short-sellers lost on AMC?

On Wednesday, June 1st, short-sellers betting against AMC lost $2.8 billion, bringing their year-to-date losses to more than $5 billion, according to S3 Partners.

The idea of short squeezing these stocks was fueled on social media, Reddit to be exact. The subreddit r/WallStreetBets made AMC and GameStop its darlings, and along the way has amassed an army of Apes numbering over 10 million.

Since then, the hashtag #SqueezeAMC has trended all over the internet. Daily trading volume for AMC has topped a staggering 650 million shares over the past…

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Markus

Markus is a self-made multi-millionaire who was born in Germany. He came to the US in 2002 with $30,000 in his pocket and a dream to become a successful trader.