AMC short sellers hit भारी 1.2 billion after stock rally

Street performers in mini-mouse costumes pass the night in front of the AMC Movie Theater near Times Square on October 15, 2020 in New York.

Amir Hamza | Bloomberg | Getty Images

Memo stock short investors AMC Entertainment Compared to last week, last year’s loss was estimated at २ 1.223 billion, according to data from S Part Partners.

The rally cooled after AMC’s shares rose to %%% during morning trading. Shares closed at $ 2.12 per share, up from 68 1.68 on Monday. At its peak, the stock reached 36.72 a share.

AMC was the most active stock on the New York Stock Exchange on Friday as more than 650 million shares changed hands. Its 0-day trading volume averages over 10 million shares, according to Factset.

With 5050 crore shares outstanding, the entire company traded at Rs. Changed hands 1.5 times.

The so-called short covering could contribute to AMC’s huge rally this week. About 20% of the company’s remaining shares have been short-sold, compared to the 5% short-term interest on the average U.S. stock, S Part Partner said.

When a heavy short stock jumps high in a fast fashion, short sellers are forced to close their short positions and buy back the borrowed stock to cut losses. Forced purchases add to the rally.

AMC’s new retail investors, who stand 2.2 million hardAs of March 11, AMC reported that the company owns 80% of the 550 million outstanding shares. Their effort, which peaked in January, pushed the stock to $ 20 a share, above $ from, and allowed. AMC to light its load 600 million.

The retail investor’s agenda is to keep AMC alive and “stick it” in the hedge fund, an analyst told CNBC.

AMC’s stock has surged more than 1,100% since January, denying Wall Street analysts’ predictions. AMC’s business is very bad. It has around billion 1 trillion and needs to defer 50 505050 million in lease repayments when its revenues dried up during the run-up. Coronavirus epidemic. Theaters were closed for several months to prevent the spread of the virus, and after the company reopened its doors, some consumers felt comfortable going to the screenings, and movie studios launched new releases.

While The movie theater business is rebounding, AMC is still facing a headwind. Although the company ended पहिलो 1 billion in liquidity in the first quarter, the highest in its 100-year history, the cash will only run until 2022 if viewers do not return for months of no revenue.

While early box-office receipts are promising, the fundamentals of the movie theater business have changed over the past year, including theater capacity, shared release dates with streaming services and days of movies playing in theaters.

“Everything really keeps them going for a long time. This company will never make money again,” Rich Greenfield, co-founder of Lightshed Partners, told CNBC on Friday morning.Squawk box“” They never generate cash with the current capital structure. This time EBITDA was traded in the pre-epidemic. It is now trading twice on EBITDA and is in a bad position today with the changed industry. It simply rejects all arguments. “

On the last day of 201, the market value of AMC was 111.77 million. On Friday, that value is about $ 11.9 billion, according to FactSet data.

– of CNBC Yun Li Contributed to this report.

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