AMC short sellers lose $2.75 Billion in yesterday’s rally

AMC Entertainment (NYSE:AMC) has seen serious momentum over the past two weeks, now up 357%. In Wednesdays trading session alone, AMC gained an impressive 95.59%. The rally saw AMC stock in particular trending on twitter with #AMCStock seeing over 17.8K tweets and #AMCsqueeze also trending. The now infamous WallstreetBets community on social media platform Reddit, has also seen a large spike in AMC and GME mentions.

According to Hype Equity data, the social media volume for AMC mentions have increased by 141% while GME has increased by 114%. Interestingly, it was only last week that HypeEquity founder Travis Rehl noted “There’s a clear desire for a short squeeze either today or very soon” after seeing a surge in mentions for AMC on social media. It is clear investors are gaining interest in AMC stock.

Net losses surpass $2.75 Billion for AMC short sellers in one trading session

The continued momentum in AMC stock has seen short sellers lose upwards of $1.3 Billion this week prior to yesterdays rally according to Ortex data. Interestingly, across the board of AMC, GME and BBBY short sellers have accumulated a net loss of over $3.85 Billion in yesterdays trading session. It seems AMC’s popularity amongst retail investors may be attributed to its recent performance gaining 544% this month alone. We will see if these losses will continue into next week as retail investors continue to push AMC stock higher.

Citi Research analysts says AMC stock is overvalued

Despite the recent gains, Citi Research analyst Jason Bazinet is not so bullish on the current valuation of AMC stock. Yesterday the analyst boosted the firms 12 month price target to $3.70 a share with a sell rating. The analyst highlighted that the firms price target is a valuation of the Q1 earnings alongside AMC raising capital from selling shares at inflated levels. Interestingly, the target had little to no effect on investor sentiment with AMC gaining 281% since the release of the target. What we can conclude from this is that the “smart money” consensus is not impacting the share price, which stems from WallstreetBets movement to hit back at large institutions short selling.

Summary

In summary, at this stage we can see a vastly growing interest in AMC and GME stock on social media which is now translating into immense stock growth. From what we know, the recent surge in the GME and AMC share price is still heavily damaging short sellers. The next few trading sessions should give investors a better indication as to how long this momentum will last.

Written by Tyger Fitzpatrick

The information above is not financial advice. Youth Investment Group has no liability for personal financial interests or investment decisions. You should make your own investment decisions based upon your own research and what you believe is best for you.

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