AMC stock: A meme stock too overvalued
Stocks that move today. Guess one stock that is moving higher making a new 52-week high on increased volume? AMC stock moves higher today. Latest AMC stock price today:
AMC Entertainment Holdings, Inc. (AMC)
As of 12:40PM EDT. Market open.
Why AMC stock moves today
“AMC Entertainment (AMC) will engage directly with its army of retail investors after the world’s largest movie theater company raised more than $230 million from a stock sale to expand. AMC stock jumped.
The moves pointed to an effort to convert its zealous supporters as a resource that lasts beyond the Reddit-fueled frenzy. Over the past few months, AMC saw its retail investor base grow to more than 3.2 million, and they owned more than 80% of the company as of March.
AMC on Wednesday launched Investor Connective. The “proactive communication initiative” will allow the company to directly communicate with a “base of enthusiastic and passionate shareholders” and provide them with special offers.
A day earlier, AMC raised $230.5 million from a stock sale to Mudrick Capital. AMC said the proceeds would go in part toward acquiring new theater leases, investments in existing theaters and paying down debt.
AMC stock is already up 54.5% this week and has soared 1,400% so far this year alone. The surge has helped pushed AMC’s market cap to $18 billion, topping GameStop’s (GME) market cap of $17.5 billion.
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Shares soared 25% to 40.06 on the stock market today. AMC stock topped a 14.64 buy point May 18 and was quickly extended, meaning shares are not in buy range. GameStop stock rose 1%. Among other so-called meme stocks, Beyond Meat (BYND) rose 3%, and Plug Power (PLUG) lost 3%.
This year’s gains in meme stocks like AMC and GameStop were fanned by speculation on online stock messaging boards like Reddit. This so-called Reddit rally was fanned by enthusiastic retail investors taking on “short” shareholders betting against the stocks. The short sellers were forced to buy shares to stop losing money, adding fuel to the surge.
Despite the surge in AMC stock, the company is still losing money and was on the verge of bankruptcy just months ago, after the pandemic shut down movie theaters for months. It’s now aggressively selling stock to pay down debt.
AMC ended the first quarter with $5.4 billion in debt and just $813 million in cash. The chain carries a low junk-bond rating of CCC-, says S&P Global. And AMC is expected to lose another $1.5 billion in 2021 and nearly $400 million in 2022, analysts say.”
Stock market data: Investors Business Daily
AMC stock: Too Overvalued, too risky, beware of its pump and dump scheme
Reddit stocks, meme stocks, are hardly stocks to invest in, stocks to buy. AMC stock is a highly speculative stock with very poor fundamentals, being too pricey. Beware of these risks before investing in AMC stock.