Amc stock has been one of the most talked about and most traded stocks in the entire stock market over the past 12 months. This is mostly due to the high short interest which is at of this article around 22%. The short interest being this high puts Amc stock at a high probability of being short squeezed. “A short squeeze is an unusual condition that triggers rapidly rising prices in a stock or other tradable security. For a short squeeze to occur, the security must have an unusual degree of short sellers holding positions in it. The short squeeze begins when the price jumps higher unexpectedly.” (Investopedia.com)
How possible is it for Amc stock to actually squeeze to the price floors the apes have been hoping for? To understand the probability of this we must for one throw all normal fundamentals out the window as this would likely not make much sense going off of that. The way the stock market works when you break it down to the most basic sense is supply and demand, or bid and ask. “Generally speaking, the prices in the stock market are driven by supply and demand. This makes the stock market similar to other economic markets. When a stock is sold, a buyer and seller exchange money for share ownership. The price for which the stock is purchased becomes the new market price.”(Investopedia.com) With this being said there is a chance that the over 80% of retail owners (the apes) hold onto their shares for dear life and watch the short sellers scramble to purchase shares at prices only the retail investors are willing to let them go for.
In reality it is quite uncommon to see things like this happen, but that being said it is also quite uncommon to see stocks be squeezed from a few dollars to almost one hundred dollars per share. I think what we all need to realize is that this play is far from an average play and with that being said we could see far from average outcomes.
Disclaimer: Our articles are NOT financial advice, we are not financial advisors. All investments are your own decisions. Please conduct your own research and seek advice from a licensed financial advisor.