AMC stock is up after a Forbes article speculates about an Amazon takeover. Short interest is down to 8.6% of float, and retail investors have bought shares. This is good news for investors who have been worried about the company's health. It's worth noting that the stock has been under pressure for a while due to concerns over its financial health. But the recent acquisition of a smaller movie theater chain by Amazon may make it a better investment than previously thought.

AMC gains after Forbes article speculates on potential Amazon acquisition of the company

The news of a possible AMC-Amazon merger was welcomed by movie-chain owners. Last May, a Forbes article speculated on a potential takeover. The stock of the company shot up more than 8 percent, with investors snapping up shares on Tuesday. However, that news was based on speculative reporting. Amazon declined to comment, but said it does not comment on speculation.

Currently, US antitrust rules prevent studios from acquiring movie theater chains, which has prevented any such deal from happening since the 1940s. However, the Justice Department announced in November that this rule would be revised in light of the complexity of the industry and the arrival of streaming companies. It's not clear how such a merger would impact the existing industry, but it could change the game. It could lead to a new trend — day-and-date cinema, more liberal release policies, and lower ticket prices.

According to a recent Forbes France article, the e-commerce giant has an interest in buying the movie theater owner. The article also noted that it is only speculation, but it does not mention that the original article was published in May 2018.

Disney doesn't need AMC Networks to survive. Disney's own content is thriving. However, the Dolan family controls AMC Networks, and they know that they are sub-scale compared to bigger media fish like Disney and Hulu. In any case, Disney could simply buy AMC Networks in cash. And if Amazon is unable to match the price, it can always try to buy the company directly.

AMC's short interest drops to 8.6% of float

This recent drop in AMC's short interest is good news for investors. After a month in which the stock has lost nearly 50% of its value, AMC's short interest dropped to 8.6% of its float, the lowest level since May 2008. Although this is still a large number, it represents an unusually low percentage of the company's float. Furthermore, the short interest ratio has grown sharply since December and is nearing the level seen in June.

Meanwhile, the Nasdaq has started to take support lines off its charts. This week alone, the Nasdaq fell over 1% on average, and fell nearly 7.5% this week - the largest weekly drop since March 2020. AMC shares were up over 40% this year but still had a high amount of short interest, which prompted the company to list on the Short Sale Restricted list.

The recent bear market rally is helping AMC stock regain some of its lost ground. It is the largest short squeeze since GameStop (GME) fell more than 3000%. The reason for this is the heightened number of hedge funds who are taking advantage of the situation. They are trying to drive retail investors into a massive loss by promoting their "summer blockbusters".

During the short squeeze, AMC was the subject of a famous short squeeze. AMC's short interest rose to a high of almost eight percent in early 2021, and the infamous Melvin Capital was forced to fold. This is not to say that the shorts have lost their money, but it does indicate that they are now back in business. If the shorts were unable to stop the stock's rise, the shorts are now looking to take profits from the rally.

In addition to retail investors, AMC has also attracted institutional and state government funds. These investors are buying AMC+GME and have already bought a large portion of the stock. They are now buying in the $30-40-50 range. While retail investors have had no trouble buying AMC, it is important to remain vigilant and voice market concerns. In the short term, AMC will squeeze and the stock will fall as low as three times its current price.

AMC's financial health has been in question

Despite the influx of cash that AMC has raised recently, its financial health has been called into question. According to USC Marshall School of Business professor Steve Moyer, AMC's current liabilities exceed its current assets by $1 billion and it is burning through cash at a rate of $100 million a month. The company recently raised $300 million to cover its operating costs but the amount of cash it is spending on interest and debt is still too high to survive the upcoming Covid-19 pandemic.

The sagging domestic box office has taken a toll on the company's finances. September's gross ticket sales plunged by 47% from year-earlier levels. By the end of Q3, AMC had to gross $2.8 billion to reach its goal. AMC has a few big movies slated for release this quarter that could make the company's financial health a point of contention. These include Dune, Spiderman, West Side Story, Ghostbusters: Afterlife, and The Matrix Resurrections.

While the recent market turmoil has caused many companies to declare bankruptcy, AMC might be able to ward off this crisis and emerge as a benevolent white knight. Amazon's $1.1 billion deal with Whole Foods left AMC worth just $500 million, according to Forbes. If AMC can manage to successfully restructure its finances, it could emerge as the only remaining theater chain in the country.

While AMC's stock price has increased by 139% since last September, its operating performance has not. In fact, a higher stock price may have actually improved the financial position of AMC. The company has now extended the maturities on $1.7 billion in bonds until 2026, which is still in junk bond territory. While it is clear that AMC's financial situation has been in doubt, the shares still seem overvalued and a buy-and-hold decision may be the best option.

AMC's shares have been soaring this year, despite the recent threat of bankruptcy. The company is expected to cash in on the SpiderMan: No Way Home movie's strong ticket sales. However, investors should consider that AMC shares could skyrocket further. If they continue to rise, more short sellers will be eager to pounce on their investment and sell. Eventually, the company's stock could reach single digits.

AMC's short interest is 10% of float

The market is very volatile, and AMC's stock is no exception. The short interest in the stock is high, and it has reached its highest level since mid-September. Even though the shares have since recovered a good portion of their losses, the shorts are still forced to buy back their shares in the event that they see a price spike. The volatility of AMC's stock is higher than the market average, at nearly 153% over the past 52 weeks. For comparison, Tesla has experienced 69% volatility so far this year.

The underlying reasons for the high short interest aren't clear. Retail investors are increasingly shorting meme stocks. Earlier this year, game stores GameStop and AMC were favorites among retail investors. However, investors are now reversing their bets on these stocks, and their overall short interest is now at near-historic levels. Retail investors are now sitting on the sidelines, which is reflected in the high short interest in these stocks.

AMC's short interest is ten percent of float. If the short interest was less, AMC could have squeezed several times in 2019. However, hedge funds always found a loophole to avoid reporting their short positions. The company has been using the cash to buy other theaters. It also bought a stake in a small gold mining company with a questionable financial history. Thus, there is a huge risk that the stock may continue to fall.

A high short interest ratio is a warning sign. Many investors may view the stock as a bargain or early warning of a dangerous product. But if the shorts were wrong, the stock may experience a sudden surge in buying. If the company can get its act together and prove that it has a solid product, the shorts may be forced to cover their short positions and AMC's share price will rally by a large amount.