Meme stock AMC Entertainment may be trading below the USD 50 threshold, but retail investors are keeping their chins up. They vow to hold on for what could be the pinnacle of all short squeezes in which hedge funds are forced to cover their bearish positions by buying shares and potentially sending the stock price soaring.
One widely followed analyst whose Twitter account is BAM Investor predicts that AMC will reach new all-time highs in August. His followers are divided on whether or not to bet on it, with some preferring that he not reveal dates so as not to tip their hand to short-sellers. In the interim, AMC shares remain under pressure and have shed 8% today.
The downtrend in meme stocks including AMC and GameStop started in June. And while both stocks are still up handily for the year, they have been leaving once starry-eyed investors feeling frustrated so far this summer. Both stocks are facing their fourth consecutive day of declines, a trend that hasn’t reared its head since early May.
Short Interest on the Rise
While the AMC stock price has been headed lower, short interest has seemingly been on the rise. Roensch Capital, a securities analysis firm, illustrated in a live update that short interest in AMC has climbed 5% higher today, and rising.
Meanwhile, Roensch also revealed that options traders are looking ahead to next year, as evidenced by more than 3K January 2022 USD 145 call contracts traded. Some of its followers are hoping to see the AMC price “pop sooner than that.”
Retail investors maintain that they are holding and not selling under the pressure. They are also complaining, however, that the stock “is being manipulated down by hedge funds.” Others are suggesting that AMC CEO Adam Aron’s backpedaling on the sale of 25 million shares could be the culprit.
On July 6, The Joe Rogan Experience podcast brought some attention to meme stocks including AMC when co-host Adam Curry addressed stock price manipulation on the show. He described how retail investors called hedge funds out for their shorted shares, particularly with GameStop and AMC, describing how sophisticated traders are now “eating themselves” and the “game is over.”
This article was originally posted on FX Empire