Movie theater company AMC (AMC) - Get AMC Entertainment Holdings, Inc. Class A Report has been one of the most profitable investments in history in a short period of time – but only for those who found the best entry points. Through short squeezes, investors saw AMC stock price jump from under $2 to $72 within a period of less than 52 weeks.
Today, Wall Street Memes reviews the gains on a $1,000 investment in AMC over the past half year.
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Diamond-handing $1,000 since January 2021
Assuming a purchase made on the first trading day in January of this year, $1,000 would have bought 500 shares of AMC valued at $2 per share. If the investor had held his or her shares until July 8, as the stock dips to the high $40s, gains of approximately 2,150% would have pushed the initial bet to $21,500.
But even for the lucky ones who managed to achieve this feat with AMC, not all has been a bed of roses. On January 27, after surging more than 800% since the end of December, AMC reached its first peak in 2021. From there, stocks plummeted by more than 50% through early May.
Worse off were those who FOMO’d near the January peak. While early-year traders merely saw part of their initial gains evaporate, newcomers found themselves in agony for almost 4 months as their initial bet would have been slashed in half.
However, those who persevered through early June witnessed a second massive short squeeze. In a matter of days, AMC stock spiked by more than 500%. Apes who placed a $1,000 bet in early May would have seen the initial capital balloon to $5,200 in days, at the all-time high reached on June 2.
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Buy AMC today?
Today, AMC stock price is 30% away from the all-time high. Share have not been performing well since the last short squeeze. It has been a time of FUD (fear, uncertainty, and doubt) for many. It remains to be seen whether the recent dip is a brief correction or a sign that the stock is declining at last.
According to many in the ape community, AMC's price should reach $100,000 (yes, many thousands of dollars per share). However, although technically possible, the target is highly unlikely. Based on recent price action, even $100 seems like a stretch for now.
For investors who wish to participate in meme mania but are reticent about speculation, Wall Street Memes has recently presented a strategy that limits downside risk. Following a barbell approach, one can add small quantities of meme stocks like AMC to the portfolio (say, 1%) and allocate the rest to a “boring” ETF like SPY. The chart below shows that doing so can produce gains with lower risk.
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How confident are you in buying AMC stock at current price levels?
(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)