Movie theatre chain AMC Entertainment (NYSE:AMC) has seen its shares go on a wild ride recently. An ongoing long-short dispute between a group of retail investors on the social media platform Redditt attempting to short squeeze a number of highly shorted U.S. stocks including AMC are trying to make life difficult for short-oriented hedge funds. This movement started out on the Reddit "wallstreetbets" forum, and has since gone viral.
The extent to which this movement can continue remains a topic of debate. AMC’s stock has been highly volatile, and it appears that a short squeeze may not be as likely as with Gamestop Corp. (NYSE:GME), the other primary target of these retail investors. This is because AMC has a lower short interest, and the company has recently been raising money at its increasingly higher stock price in recent days.
That said, if enough retail buyers continue to step into the market in a big way, there’s really no telling what could happen. There’s the potential this stock could go parabolic. There’s also the potential AMC could go back to trading around $1 per share. Investors looking to get in on this trade need to realize at this point in time, these shares are purely speculative.
This is a stock which has frenzied "mob-like" buying, so betting on the downside is risky.
Similarly, this stock is highly shorted for a reason, so to think this stock could go to Gamestop-like levels might not be realistic.
Invest wisely, my friends.
