Today, we'll take a look at the current situation around the AMC company shares. These shares have recently risen by more than 50% in just a few trading days. *
This may sound like great news for investors, but it is important to note that the short float, which is the percentage of shares that are shorted, is high – 22%. This figure is extremely high and explains why there is a sharp short-term rise in the share price. Traders who short these shares are under pressure and have to close their positions, which drives the share price ever higher. However, the long-term and medium-term trend is downwards. [1]
Experts say that many investors are interested in these short-term rallies, but it is a very risky trading strategy. Share prices are consistently falling and fundamentally, you can see rapid revenue growth, but the company is still losing money. Analysts expect the company could be in the black as late as 2025. Wednesday's trading day (Jan. 18) brought the first warning signs that the recently started temporary rally could likely end here. [2]
It should be noted that these shares, due to their movements, are more suitable for traders who are willing to take a lot of risk. If an investor is looking for a stable and safe investment, this stock is not the right choice.
AMC Entertainment Holdings, Inc. (AMC) is an American company that operates cinemas. The company was founded in 1920 and is one of the largest cinema operators in the US. AMC operates more than 1,000 cinemas in 15 countries, including the US, Canada, Britain, Italy, the Netherlands, and China. The company also operates digital cinemas, IMAX cinemas and other special cinemas such as Dolby Cinema and PRIME. AMC is also involved in film distribution and advertising space sales.
* Graph of AMC Entertainment Holding Inc. performance over the past 5 years (source: Investing.com)
* Past performance is no guarantee of future results.
[1,2] Forward-looking statements are based on assumptions and current expectations, which may be inaccurate, or the current economic environment, which may change. These statements are not guarantees of future results. They involve risks and other uncertainties that are difficult to predict. Results may differ materially from those expressed or implied by any forward-looking statements.