Given the recent spike in stock market volatility, the idea of investing in a company and seeing its share price really soar may seem like a pipe dream to the average investor. However, AMC Entertainment has retail investors known as the Apes ready for the next move up which could trigger a short squeeze.
REASONS AMC STOCK IS READY TO SHORT SQUEEZE
- AMC Debt has been paid down and refinanced
- Box office lineup has forecasts reaching $9 billion in 2023
- Short interest still above 20% which is very high
- Shares on loan are still near all time highs
- Cost to borrow CTB is rising
- FTDs are through the roof which could indicate naked shorting
- Short seller thesis is destroyed
HOW HIGH COULD AMC STOCK GO?
Image: Eric Glenn | Credit: Shutterstock
According to “Disnat.com” Stock prices change every day by market forces. By this we mean that share prices change because of supply and demand. If more people want to buy a stock (demand) than sell it (supply), then the price moves up. Conversely, if more people wanted to sell a stock than buy it, there would be greater supply than demand, and the price would fall.
That being said, the principal theory is that the price movement of a stock indicates what investors feel a company is worth. Don’t equate a company’s value with the stock price. The value of a company is its market capitalization, which is the stock price multiplied by the number of shares outstanding. For example, a company that trades at $100 per share and has 1,000,000 shares outstanding has a lesser value than a company that trades at $50 but has 5,000,000 shares outstanding ($100 x 1,000,000 = $100,000,000 while $50 x 5,000,000 = $250,000,000). To further complicate things, the price of a stock doesn’t only reflect a company’s current value–it also reflects the growth that investors expect in the future. Source: “Disnat.com”