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AMC stockholders enjoyed gains of more than 20% on August 24. Wall Street Memes takes a closer look at AMC’s recent performance.

The August 24 trading session provided AMC stock  (AMC) - Get AMC Entertainment Holdings, Inc. Class A Report owners with reasons to be optimistic about a run towards new peaks. Possibly motivated by broad market movements that were also positive, AMC surged 20% and finally broke into the $40 levels once again.

Not yet satisfied, ambitious apes still believe that the recent move in AMC is just the tip of the iceberg, and that the path to the moon is gradually being paved. Wall Street Memes reviews AMC stock’s recent performance.

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Broad market strength

The US stock market had a record-breaking day on August 24. In a week marked by chatter around monetary policy and the Jackson Hole symposium, vaccine approval news and the Chinese market’s retraction helped to fuel the market’s euphoria in the US.

AMC trading volume reached about 220 million shares on August 24, more than double the average 10-day metric.

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Figure 1: AMC historical data and trading volume.

Bullish drivers

AMC’s popularity across the main online discussion boards remains at peak levels. The top meme stock’s performance mirrored WallStreetBets’ commentary volume, although correlation does not necessarily mean causation.

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Figure 2: WSB ticker sentiment - AMC.

Short interest remains elevated and on the rise, at around 18% according to Yahoo Finance. Also, Wall Street analysts bearishness towards the stock has served as fuel for defying AMC apes in their quest to squeeze short sellers out.

The company’s recent financial performance may also be playing a role in stock price action. The above-expectations Q2 earnings report, which pointed at a scenario of post-pandemic recovery for AMC, reinforces the fundamentalist thesis. Keep in mind, however, that meme mania has much more to do with momentum and market dynamics than with business fundamentals.

SEC looking closely at dark pools

One of the biggest complaints and concerns of AMC shareholders is the lack of transparency in the market. There seems to be a consensus among the ape community that dark pool activities and naked short selling could be hampering AMCs ride to new highs.

Recently, SEC Chair Gay Gensler spoke directly on the matter, stating that the agency is looking closely at dark pool activities to protect investors. While no firm action has been taken yet, the SEC’s willingness to address the issue can be seen as positive news.

Short sellers get slapped

With over 92 million AMC shares currently shorted, sellers have racked up billions of dollars in losses since meme mania emerged. The latest data provided by third-party research reveals that, as of July 20, shorts had incurred year-to-date losses of $3.8 billion.

Short seller losses are probably even higher now, since AMC stock has spiked 20% in August alone. Amid a new wave of optimism, bears might be playing with fire. How long will they withstand the upward pressures? Apes’ bet: not very long.

(Disclaimers: this is not investment advice. The author may be long one or more stocks mentioned in this report. Also, the article may contain affiliate links. These partnerships do not influence editorial content. Thanks for supporting Wall Street Memes)

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