Amidst the recent meme stock rally that has seen GameStop (NYSE: GME) and BlackBerry (NYSE: BB) make exceptional price gains in a short time, the shares of AMC Entertainment (NYSE: AMC) are among the winners of the bullish momentum, and more advances could be in store.
As it happens, AMC stock has recorded massively high options trading activity, resulting in the company raising around $250 million of new equity capital through the sale of 72.5 million shares at an average price of $3.45 as part of its previously disclosed ‘at-the-market’ equity offering launched on March 28.
AMC stock Reddit hype
Notably, AMC shares are among the best examples of meme stocks, i.e. stocks boosted by social media hype rather than typical business fundamentals such as growth and revenue, witnessing a short squeeze this week as it assumes the leading position as one of the top five trending stocks on Reddit.
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Indeed, AMC stock has recorded 2,237 mentions on the social media platform’s most active stock and cryptocurrency subreddits over the past day, an increase of 109% in the last 24 hours after soaring a whopping 4,116% the day before, according to the recent information retrieved on May 15.
As a reminder, other trending meme stocks on Reddit in the last 24 hours include GameStop and BlackBerry shares, which have taken the second and fourth positions, respectively, with GS mentions soaring 23% and BB 312%, slowing down from the previous advances of 428% and 3,894.
AMC stock price analysis
Meanwhile, with premarket gains of 5.40%, AMC stock appears ready to hit $7.22 before markets open after closing the day at $6.85, which suggests a 31.98% increase in the last 24 hours, a 117.46% gain on its weekly chart and a 177.33% advance in the past month, as per data on May 15.
Reminiscent of the GameStop phenomenon from 2021, a large number of retail investors, in agreement on Reddit and other social media platforms, have come together to bet against hedge funds and other short-sellers of AMC stock, with the short percentage of AMC shares outstanding presently at 18.82%.
At the same time, popular American economist Peter Schiff has accused AMC of taking “advantage of a speculative frenzy,” arguing that the company “has a broken business model” and has to “either restructure to achieve profitability or go out of business.”
On the other hand, experts like Tuttle Capital Management CEO Matthew Tuttle believe that the meme rally couldn’t have come at a better time for AMC, with Citi’s analysts lifting their price target on AMC stock from $3.10 to $3.20, as Finbold reported on May 14.
Ultimately, the increasingly popular trend of ‘small’ traders trying to ‘stick it’ to major short-sellers by longing certain stocks so far seems to be fruitful, including in the case of the movie theater operator, much like how it all happened to GameStop a few years ago.
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