Thursday 3 June 2021

AMC short squeeze to $1000?

One news dominated the week and it's definitely none other than AMC. Known as one of the meme stocks which also includes GameStop, AMC has grown exponentially this week due to the same but also other reasons as well. Today, let's talk about the reasons causing the short squeeze and exponential growth, whether it is still a good time to put your money in and where will it go from here. I previously did a video where I mentioned I bought AMC. I actually set a sell order at USD26 hence it was sold off and I am officially now a paper hander.

Read more: Why emotions can kill your gains from investing | I bought AMC and Apheria at a high | Losses so far


Hedge funds

So the original narrative causing this parabolic growth still stays which is to edge out and cause the hedge funds who have been shorting this stock to lose money as the price of the stock increases and they will have to cover their positions.

You can see from the 1 year chart, 6 months, 3 months and even 1 month that the growth has been up, up and away. I did mentioned previously that I bought like 2 shares of AMC, I put a sell order at $26 hence it was done and sold.

Should you still put your money in?

I mean most people who will put their money in usually mention about the cause of putting it in, it is one of the most direct way of showing the institutions, the power of retail investors. Because the institutions have overly shorted stocks in a way that is ridiculous. I mean no one can really advise you whether you should be investing your money in it and especially from a paper hand like me, I don't think you should listen to me. But if you extra cash lying around and you are not hard up for it to be profitable. After all, you will be in the best community ever and go down in history as someone who fought with the hedgies.

No, I am joking, again to emphasise like always, invest with money that you can afford to lose and investing with the mindset of doubling or tripling your money is like gambling which is highly not recommended.

AMC to the 🚀

As of 3 June 2021, AMC is priced at USD65.22 per share which is 🤯 mind-blowing. I have to say that AMC is very good in engaging their retail investors as they are rewarding their retail investors through a special websites where they can get free popcorn and also exclusive viewings to certain movies. This definitely creates some form of novelty to holding the stock and I think it's a super great initiative especially for those in the US as it can provide more business opportunities as the audience will go to the theatres to redeem the rewards.

AMC has also sold some of their shares (8.5 million) where it plans to use the proceeds for "the pursuit of value creating acquisitions of theatre assets and leases, as well as investments to enhance the consumer appeal of its theatres." AMC said it will also look for opportunities to reduce debt which I think is great. AMC is certainly taking steps to improve it's position using the power that the retail investors have given it.

Where will it go from here?

*Before proceeding, I have to say that this is just opinions on my end, I am not a financial advisor and in no way should you take this seriously. I also have no position in AMC.

To be honest, now is the time when people who have no AMC shares to feel a little FOMO, I mean the share price has gone up like a rocket and if this is the case, I would think that there will be no problem with the stock prices hitting $100. Basically, if you see the upward trend, it is pretty strong but we definitely do not know when will it die down and I think the crucial point of this is when did you enter, your entry price and when will you get out. These are what you will need to plan before initiating a position unless you really are all in against the hedgies and profit or loss does not matter to you. Hope you guys enjoy today's video, do hit the like button and subscribe to my channel for more content! 

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