Why Is AMC Entertainment (AMC) Stock Up 20% Today?

Is the meme business back? Invest in AMC entertainment (NYSE:AMC) seem to think that’s the case as shares of AMC stock rose in today’s session.

The cinema operator rose more than 20% on the day after little news. The hike appears to be tied to a speculative momentum-driven hike, just a day after comments from Federal Reserve Chairman Jerome Powell suggested the pace of rate hikes could slow.

Interestingly, today’s move also included a trading halt for AMC shares during today’s session. Some analysts are linking these trading halts to a sharp increase in options activity, with a brief pass likely to drive much of today’s rally.

As with last year’s parabolic wave, it appears that short squeeze enthusiasts are back. There’s something about the historic matrix ending the fourth quarter and heading into the first quarter that has retail investors excited. Thus, perhaps we are set up for another period of high volatility with such stocks.

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Let’s dive into what investors should make of this move today.

What’s happening with AMC stock today?

With little happening in terms of actual news flow, this move is clearly the latest example of speculative mania still in the system. Basically, AMC shares are on a precarious footing. This is a company that is still heavily leveraged, is not profitable and is seeing revenues that are still below pre-pandemic levels. Many in the bond market seem to be of the opinion that this company will not get out of this mess.

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If we are indeed headed for a recession, then AMC stocks should be avoided. That said, it’s clear that AMC has a fervent following of retail investors willing to jump on any reason to get bullish. Lately, talk of a potential central bank seems to be the spark speculators need.

Other prominent meme stocks that rallied early last year are also seeing spikes today. Accordingly, it will be interesting to watch AMC stock and its meme peers in the coming trading sessions.

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As of the date of publication, Chris MacDonald did not hold (directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com’s publication guidelines.

Chris MacDonald’s love of investing led him to pursue an MBA in finance and take on a number of management roles in corporate finance and venture capital over the past 15 years. His experience as a financial analyst in the past, combined with his enthusiasm for finding undervalued growth opportunities, contributes to his conservative, long-term investment perspective.


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