Is AMC stock heading to the moon? Shares of the movie theater operator have been on fire lately, and “apes” are justified in their optimism for what could happen next.
AMC Stock (AMC) - AMC Entertainment Holdings, Inc. March 28 was a great day for Class A Report and its investors. Shares were up an astonishing 41% at the time of writing this sentence. It was AMC's best day in the market since June 2021, when shares climbed as high as $62.
Monday was not an outsider, mind you. The AMC has almost doubled in price as the 2022 low is reached as recently as March 14. Could this be the beginning of the journey to the Moon?
AMC Stock: A Wild Ride in 2022
It's been a wild ride for AMC stock so far in 2022. The shares began trading for about $27 in the year, which is roughly the same price today. But between then and now, much has happened to keep "AMC Apes" entertaining and hopeful.
As with the rest of the stock market, AMC plunged in the first several days of the new year. From early 2022 to March 14, AMC sank by 50% in just ten weeks.
Since then, AMC has recovered surprisingly. Shares climbed 8 out of the last 10 trading sessions, more than three times as much as 10%. Visually (see below), one can see how AMC stock looked for a floor in February and early March, then closed in a matter of days.
Why is AMC rallying?
What probably helped fuel interest in AMC stock was an early recovery in the broader market, which ultimately invited some risk-taking. The S&P 500 and Nasdaq 100 also bottomed on March 14 and have since broken out of higher levels, supported by the following:
Some turned away from market shocks caused by the conflict in Ukraine;
The Federal Reserve announced its first interest rate hike in years.
But a few company-specific events contributed to improving investor sentiment.
For starters, AMC's earnings release in early March provided evidence that the company is no longer in survival mode. The management team is fully committed to turning the page and addressing opportunities for further growth.
Just before AMC stock went down, the company also announced that it is ready to accept Dogecoin and Shiba Inu as payment on its website. Over the past quarters, I noticed how news on crypto and NFTs was perceived as positive by investors.
Then, AMC announced that it would become more than a movie theater operator. It acquired partial ownership of gold miner Hycroft Mining Holding (HYMC) in an effort to diversify operations, and cashed in on what CEO Adam Aaron considered a good deal.
All of the above helped AMC in at least one way: It brought the stock back into the limelight. The increased popularity bodes well for the "meme theme" that has helped propel AMC stock to the heights seen last year.
Is AMC going to the moon?
The multi-billion dollar question is this: Will AMC stock continue to rally and eventually head to the moon, as many of its investors expect? Clearly, it is impossible to know for sure.
However, the essential elements for another "meme rally" do exist:
- Increased popularity and short-term gains lead to FOMO, in a nice bullish cycle
- A better market environment that invites risk taking
- The Decent Business Basics That Help Crush the Bear Thesis
- Small interest increase of 20%, according to Ortex, which could lead to a small squeeze