One of AMC Entertainments Most avid retail investors will play a long game of stocks, but will see stocks return to earth before the end of the year.
Speaking of CNBCs “Squawk Box” On Friday morning, Trey Collins, 23-year-old host of Trey’s Trades channel on YouTube, said he believes the fundamental value of AMC stock will be between $ 20-25 per share by the end of 2021.
“I think most retail investors understand that this is not the true fundamental value of AMC,” said Collins.
The company’s shares hit an all-time high this week, hitting $ 72.62 before pulling back. The company’s shares rose about 2% during intraday trading, last trading at about $ 52.
“Just because the stock market tells you exactly what every single security in the market is worth at that point in time, if there’s someone willing to buy AMC stock, which trades for $ 47, that means that it’s worth $ 47, ”he said. “The momentum trading aspect, while not necessarily reflected in current earnings or future expected earnings, does not mean there is no money to be made.”
Collins uses social media to document his investments in the stock market and has become the de facto go-between between AMC and its largest shareholder base, the Monkeys. Collins interviewed AMC CEO Adam Aron twice, including Thursday night, broadcast their conversations live on its 280,000 subscriber channel, many of whom own AMC shares.
“Adam Aron sets the bar for CEOs who reach out to retail investors and care about what they ask for, what they are looking for, what matters to them, while looking after the long-term health of the company,” said Collins.
Collins has used his platform to disseminate information about AMC stock over the past few months, denouncing short sellers who are betting against the company. Collins publicly states that he is not a financial advisor and warns his social media followers not to “blindly follow my financial decisions.”
AMC’s transition from a mature company to a meme stock came in the wake of the coronavirus pandemic that closed the brand’s cinemas and suspended revenue. When AMC fell behind on its rent, it hurried to raise funds. With AMC close to bankruptcy, short sellers poured in, doubting the company could weather the storm.
Thanks to AMC’s own fundraising and the apes that drove the company’s share price up, Aron was able to use interest in the stock to raise more money.
After selling hundreds of millions of shares in the past six months AMC urges its shareholders to spend 25 million more that it can spend after 2021.
Aron repeated during his interview with Collins on Thursday that the company was company examine several acquisition opportunitiesincluding purchase ArcLight and Pacific theater locations closed during the pandemic, and would use funds from stock sales to do this.
He also said the money could be used to pay off debts, cut interest costs, or pay off millions in unpaid rents.
AMC has short about 18% of its float stocks, up from about 5% for an average US stock, according to data from S3 Partners. This week’s rally drove short sellers’ losses to more than $ 5 billion over the year, S3 data showed.
The company’s shares are up more than 2,300% since January.