AMC Entertainment (AMC) is the new poster child of meme stocks—a position that GameStop held for most of the first quarter of 2021. AMC stock surpassed its highs in the short squeeze 1.0 and become the rare meme stock to hit a new high in short squeeze 2.0. Matt Kohrs is holding a live stream on YouTube on June 16 to discuss AMC stock.
AMC stock went as high as $72.62 but has since fallen. Like the previous short squeeze, AMC announced a stock sale to capitalize on the stock’s rise. AMC needs money to bridge its cash burn. The company also needs to repay some of its debt as well as deferred rent obligations.
Matt Kohrs on Jim Cramer
In response to a question on Jim Cramer, while Kohrs acknowledged Cramer’s knowledge of the market, he said that commentators like Cramer might not appreciate names like AMC since they are “really hard to understand” and called it a “giant social movement playing out on the stock market.”
In response to another question on whether AMC can hit $1,000, Kohrs said that it could. Currently, AMC’s stock price is around $55. If the stock rises to $1,000 and assuming AMC doesn't issue more shares, it would mean a market capitalization of over $500 billion. That looks like a fairly far-fetched target for a cinema chain company. Later in the stream, Kohrs also advised viewers not to focus on a target price for AMC.
However, he said that AMC stock has support at $55, which the stock actually breached on June 16. He also said that the stock has support between $50 and $52.
When AMC stock opened lower, Kohrs said that he likes to wait for the first 15 minutes of the market. Stocks tend to be volatile in the first few minutes of trading. They react to overnight news, both macro as well as company-specific news.
Matt Kohrs on Bitcoin
Kohrs said that Bitcoin is a good long-term investment. Bitcoin prices have been very volatile and Elon Musk’s flip-flops have been impacting the prices. After pushing Bitcoin to a record high by investing $1.5 billion in the cryptocurrency, Musk triggered a sell-off by saying that Tesla wouldn't accept the crypto as payment since it isn't environment friendly.
Wall Street on AMC stock
Kohrs’ stream specified that he isn't a financial advisor. Retail traders have been following the advice of Reddit traders and influencers like Kohrs. In some of the names, meme stocks trade way above what Wall Street analysts think they are worth.
AMC and GME are two examples where the stocks are trading way above even their highest target price. However, Reddit traders have been pumping them and, in the process, helping the companies raise more capital.
Kohrs’ views on AMC stock
I would agree with Kohrs’ views on the Reddit mania being a new phenomenon. Retail investors acting as a cohort was unheard of. Also, we are seeing a new phenomenon where retail investors are becoming the dominant shareholder group.
Both AMC and GME appreciated the support from retail investors during their most recent earnings call. AMC is even offering perks to shareholders including free popcorn at the cinemas.
Can higher retail ownership and confidence shown by retail investors keep the price elevated for long? We don't know, but the example of Tesla tells us that retail investors can prove the best of Wall Street hedge funds and fund managers wrong.