AMC rises, Meme shares retain their gains; Jim Cramer warns Iceman Cometh
AMC Entertainment (AMC) – Get a report shares rose on Monday, after a 20% gain last week that lifted the movie chain’s value to nearly $ 30 billion, as the two most active stock names continue to add value to retail investor portfolios.
The streets Founder Jim Cramer, however, warned on Monday that the ability of memes-fueled investors to raise stock prices may wane in the coming weeks, citing a series of unsuccessful recommendations from discussions on the chat room r / wallstreetbets from Reddit.
Cramer noted that Wendy’s recent setbacks (MAGNIFYING GLASS) – Get a report, bed bath and beyond (BBBY) – Get a report and the cliffs of Cleveland (FCF) – Get a report – all of which benefited from either an increase in retail sales or an attempt to squeeze investors betting against the stock – suggest a decline in the influence of the two stocks that sparked this year’s phenomenon: AMC and GameStop (GME) – Get a report.
With both stocks, however, Cramer says the only real bet is that AMC CEO Adam Aron and GameStop chairman Ryan Cohen can raise enough money from the stock sale to buy an industry rival and revive. their failing businesses.
AMC, which unveiled plans to sell 12 million new shares earlier this month after placing an additional 8.5 million shares with hedge fund Mudrick Capital, is seeking approval to sell 25 million shares at some point next year to fund a potential “value-creating” investment. Opportunities.
GameStop, meanwhile, has announced plans to sell up to 5 million shares in a “to market” offering, noting that it will use the capital for “general corporate purposes” and will invest in “growth initiatives” after a loss in the first quarter.
“Right now, AMC is a $ 30 billion company with very little hope that it can survive unless it monetizes memes support, which is exactly what it should be doing.” , Cramer said in his Real Money Monday Column. “GameStop needs a brilliant plan and although Cohen has recruited some brilliant people, the problem is, what will the company be? It can’t be what it is. No industry insider thinks that it’s possible. “
AMC shares rose 4.3% on the pre-trade Monday to indicate an opening bell price of $ 61.85 each, a move that would take the stock’s one-month gain to around 410 %.
GameStop shares edged up 1.25% to $ 216.50 each, a gain of 22.5% from levels last month.
Data from Yolosocks.live The website, which tracks real-time mentions of the actions in Reddit’s r / wallstreetbets chat room, says AMC is still the most discussed action among users over the past 24 hours and over 832 hours. mentions.
Short-term interest in AMC stocks remains high, however, with data from S3 Partners putting it at 68.83 million. This represents around 13.8% of the free float, or just under $ 4 billion in market value.
For GameStop. Short-term interest is around 11.5 million shares, or 19.9% of the outstanding float, setting bets against the losing money retailer at $ 2.64 billion.