AMC stock (AMC) - Get AMC Entertainment Holdings, Inc. Class A Report is at the center of a debate between Wall Street and retail investors, in a case where stock performance has been driven more by meme frenzy than by business fundamentals.
In a recent CNBC interview, Macquarie analyst Chad Beynon and AMC trader Matt Kohrs compared notes about AMC stock. Wall Street Memes takes a closer look at the discussion.
The Wall Street side of the debate
The latest Wall Street take on AMC came from Macquarie’s Chad Beynon. He recently downgraded the stock from neutral to sell, putting a price target of $6.
The analyst weighed his recommendation based on the company fundamentals. He seems to believe that the movie lineup for the rest of the year is not looking great and sees AMC’s box office revenues staying below pre-pandemic levels until 2023 at least.
In the interview with CNBC, the analyst elaborated further. When asked about the impact of market dynamics on AMC stock, Mr. Beynon said that the technical setup looked positive and that the stock is very popular. However, he also believes that meme investors can get distracted and shift their focus away from AMC, deflating the argument for a short squeeze.
(Read more from Wall Street Memes: AMC Stock: What The Smart Money Keeps Missing)
The ape side of the debate
Matt Kohrs' pointed out the flaws in Mr. Beynon’s argument, saying that millions of investors who bought AMC’s shares did not do so for fundamentalist reasons. He said that apes are in for a swing momentum trade instead, looking for a short squeeze.
Matt also said that he is extremely “ape-ish” on the stock’s technicals. Once AMC stock reaches the $50 levels again, he believes that many short sellers will be underwater, which should add pressure for them to cover their short positions.
(Read more from Wall Street Memes: AMC Stock: This TV Personality Is A Meme Frenzy Advocate)
Matt Kohrs’ strategy to sell
Matt was then asked about the ideal time to sell the stock and cash in the profits, assuming a rally takes shape. The trader laid out his personal strategy: to follow the trend while keeping an eye on key short metrics, without necessarily establishing a price target. He offered the following caveat:
“This is where I think a lot of people have different opinions, […] I’m obviously not a financial advisor. I implore everyone to come up with their own trading plan.”
Wall Street Memes’ take
Both Chad Beynon's and Matt Kohrs' takes seem reasonable and can coexist. On the fundamentalist side, AMC has a tough challenge ahead in the face of a lingering pandemic. On the other side, meme frenzy seems far from over, and additional short squeezes are possible.
For AMC stock to head to the moon, however, Macquarie’s opinion on apes losing their focus needs to be proven wrong. In that regard, apes seem committed to the cause, arguably more so than what we have seen with other meme stocks that have lost steam along the way.
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(Disclaimers: this is not investment advice. The author may be long one or more stocks mentioned in this report. Also, the article may contain affiliate links. These partnerships do not influence editorial content. Thanks for supporting Wall Street Memes)