Most professional strategists are advising retail traders in AMC’s stock to be cautious after its latest one-day insane move higher that is completely devoid of fundamental analysis.
“When the music stops, this stock is going to fall hard in my opinion,” said Miller Tabak strategist Matt Maley on Yahoo Finance Live. Shares of AMC exploded more than 100% in afternoon trading on Wednesday, leading the way in a renewed bid by retail investors to send meme stocks such as GameStop, popular earlier in the year, back to dizzying new valuation heights.
AMC’s stock price was sent into overdrive starting on Tuesday, as the company — which like other meme names has weak fundamentals for a myriad of reasons — unveiled an 8.5 million share sale. The company fetched $230.5 million in the sale to investor Mudrick Capital (which then reportedly sold the stake, saying the stock was overvalued). The movie theater chain has reportedly earmarked the money for the acquisition of closed theaters.
Shares have also been boosted by a favorable box office performance during Memorial Day weekend, experts said.
AMC’s market cap now stands at a lofty $30 billion in spite of steep losses through the COVID-19 pandemic and an uncertain post-pandemic life.
Maley added, “Some people may think it [AMC] could go to $50. But if you think that, you are betting on a Tesla-type game plan here where they [AMC] could change the world. I don’t see that.”
Maley made those comments earlier in the day when AMC shares were trading around $36. As of Wednesday at about 2:45 p.m. ET shares were around $61.
Despite the warnings from institutional pros such as Maley, the influential retail investor crowd is saying — at least for now — they don’t care what experts think.
AMC’s stock has been by far the most mentioned on WallStreetBets over the last 24 hours (easily beating other meme stock favorite GameStop), according to social media tracking service SwaggyStocks. Positive sentiment on the stock is outpacing negative sentiment by about a 4:1 ratio.
Meanwhile over on other social media tracking service HypeEquity, AMC continues to show “sustained” retail investor interest, a source on the platform told Yahoo Finance.
Bed Bath & Beyond has also been swept up into meme stock mania, its stock is up about 44% Wednesday afternoon — here’s what CEO Mark Tritton just told Yahoo Finance Live.
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