AMC apes are wondering if AMC stock will squeeze in 2023 and soar to the moon. Here is my take on whether AMC shares will squeeze to $60+ this year.
AMC Stock is Heavily Shorted Thanks to Naked Short Selling
AMC’s short interest is 23% with 185 million shares on loan at the moment but AMC shares cannot seem to make it past the $7 resistance level.
AMC stock is supposed to be at 100% utilization meaning all available shares were already lent out to short sellers.
Even though AMC was placed on the NYSE threshold list, that hasn’t stopped market makers and naked short sellers from shorting the stock.
There is a huge push to keep AMC stock from soaring to the moon by naked shorts via dark pools.
Another key problem is the long term effect of NYSE halts on AMC’s stock price. AMC shares have been down trending over the long run after each halt.
Halts protect short sellers from massive losses instead of protecting retail shareholders so it’s an uphill battle to defeat both the NYSE circuit breakers and naked short sellers.
AMC CEO Adam Aron is Dumping His Bags on Retail Shareholders
Both companies agreed to sell as much as 86 million shares worth of APE to raise cash for general corporate purposes. AMC CEO Adam Aron will most likely use the proceeds to raise cash and pay down AMC’s debt further.
The problem is that both Antara and AMC are dumping on APE shareholders to load their bags, which leaves retail traders getting the short end of the stick.
APE was a huge distraction and didn’t solve AMC’s core problem: lack of expense control.
However, there is the possibility for a change in overall market sentiment that could send AMC to double digits this year.
January CPI Inflation Data Could Cause a Squeeze on February 14th 2023
It would take a lot of buying pressure to force AMC stock upwards even with all the naked short selling. That catalyst could be when January CPI inflation data is released on February 14th 2023 at 8:30 AM EST.
This will be a key indicator to let investors know if Jerome Powell’s comments about disinflation are accurate.
If the market responds positively then meme stocks such as AMC will start going up in response to lower inflation. As inflation cools off, consumers will have more disposable income to visit AMC theatres and buy movie tickets, popcorn, etc.
A $30 AMC Price Target Is More Likely Than $60
The Good ol’ days of AMC stock trading at $60+ are likely over thanks to the dilution of APE shares. However, $30 is a strong possibility if meme stocks become hot again on cooling inflation.
Holding AMC stock is worth a gamble but I think buying AMC calls leading up to February 14th provides more upside in the short term.