6/19/2023 0 Comments When will amc squeeze![]() ![]() The rise of Dogecoin ( DOGE-USD) was almost as dramatic. GameStop’s (NYSE: GME) squeeze in 2021 saw shares rise 1,600% within days. History, however, tells us this figure is typically far higher for meme stocks. Such a squeeze would price Mullen’s shares at roughly $1.60. Today’s 185% interest rate means short sellers need the stock to zero out by December to break even.Ī study by The CXO Advisory Group found that the average short squeeze rises 27% within two days of its initial jump. And the sudden rise of borrowing rates means it’s likely that short sellers could blink first. ![]() The company has an intensely loyal following on social media, making “swarm trading” far more likely. Mullen’s recent trading presents a similar opportunity on a compressed time scale. I’ve noted before that shares of the department store doubled at least eight times in the years leading up to its delisting. And failing enterprise like Sears Holdings offer plenty of opportunities for profit before they go to zero. The retailer would collapse less than a year later. In 2022, for instance, a college student made $110 million trading meme stock Bed Bath & Beyond (OTCMKTS: BBBYQ). Still, these facts matter less to short-term swing traders and hedge funds. The company also has significant corporate governance issues that should keep most investors away. Though the firm supposedly has over $100 million of available cash, its liquidity situation looks far tighter… Mullen could struggle to produce the 1,000-vehicle order recently announced.Įven if the company could recoup the value of its Bollinger and Electric Last Mile Solutions acquisitions, the firm is now carrying far too much debt for equity holders to own much. As I noted last week:Ī strict, bottom-up valuation of Mullen paints a grim picture. These measures were important for the company in order to deleverage its balance sheet and maintain financial viability.A friendly reminder: Mullen’s beaten-down shares could become worthless in the long run. Despite a reasonably high short float, AMC’s shares jumped as the Delaware judge ruled against lifting AMC’s status quo order for the conversion of APE stock into Class A common stock and a 1-to-10 reverse stock split. Click here to access AMC’s Growth, Momentum, and Sentiment ratings.ĪMC is trading below its 50-day and 200-day moving averages of $5.36 and $7.17, respectively, indicating a downtrend. Its weak profitability justifies its D grade for Quality.ĪMC is ranked last out of five stocks in the F-rated Entertainment – Movies/Studios industry. ![]() It has a D grade for Value, consistent with its stretched valuation. AMC has an F grade for Stability, in sync with its 2.04 beta. Our proprietary rating system also evaluates each stock based on eight distinct categories. ![]() The POWR Ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree. The difference in prices between AMC’s common stock and the APE units provided an opportunity for arbitrage traders to capitalize on the price variance, expecting the prices of the two to be equal once the conversion of the APE units to common shares materializes.ĪMC has an overall D rating, equating to Sell in our POWR Ratings system. In March, AMC shareholders approved increasing total shares by converting APE units to Class A common stock. Borrowing fees had jumped to more than 750% last week when the pool of borrowable AMC shares decreased significantly. The high short demand has caused borrowing fees to skyrocket. Let’s discuss why.ĪMC currently has very high short interest due to its poor fundamentals and plans to convert AMC Preferred Equity (APE) shares into AMC Class A common stock. Currently, AMC has a short float of 24.6%, which indicates another potential short squeeze. Buying shares to minimize losses leads to a further spike in the price. A short squeeze happens when a significant, short-term spike in a stock’s price forces short sellers to buy shares to minimize their losses. ![]()
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