Are stock ‘cultists’ pumping AMC shares?

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AMC Theatres, the teetering movie-theater chain with a stock that trades like a FAANG, was supposed to skyrocket even further last week on a breakout quarter — igniting a “short squeeze” that would crush company naysayers.

That was the word on social media and promoted by the stock’s ardent, cult-like followers who call themselves the “AMC Apes.”

Yes, the company had a decent quarter, though hardly a breakout. There was a run-up in shares before the earnings hit the tape, bolstered in large part by those aforementioned Apes and their media boosters who yearn so much for social media approval that they will indulge the Apes’ baseless predictions.

But when the dust settled on Monday’s earnings announced after the bell, shares of AMC fell more than 11 percent. There was no short squeeze, of course, because the stock fell. (Squeezes occur when short sellers betting a stock will crumble have to scramble to buy shares as the stock surges.)

For his part, Adam Aron, the company’s very capable CEO, announced with good cheer things are getting better: People are getting vaccinated and movies are coming back. (He also announced he would sell $53 million of his company stock.)

But he was clear to point out: The company faces tremendous challenges. The pandemic continues to depress moviegoing and of course streaming is a viable alternative to people who hate the ­experience of spending all that money to sit next to someone who can’t keep his mouth shut during the show.

To make up for these negative long-term trends, AMC is entering the crypto business. The company accepts crypto as payment for a ticket and Aron said it may soon develop its own digital coin.

Plus, AMC will now go full-on in the popcorn business; not only will it sell its high-priced product to moviegoers, but it will be sold in malls and stores and elsewhere. Yes, you can stream your favorite movies, sidestep the theater inconveniences, and still have your AMC popcorn.

The AMC Empire 25 theater in Times Square.
While “AMC Apes” claim the movie theater stock is skyrocketing to the moon, the stock price could point to a “pump-and-dump” scheme.
Evan Agostini/Invision/AP

Talk about diversification!

Which brings me back to those Apes. They make a lot of noise about the markets being rigged even as AMC hovers well above the penny-stock levels its earnings (losses) suggest. They say AMC would be flying “to the moon” if it weren’t for some anonymous short sellers applying their magic in “dark pools” to depress a ­company that’s really killing it.

And by the way, despite all the rigging, the “Mother Of All Short Squeezes” will be pushing shares to $100 and beyond, they contend — so jump on board.

Some may really believe this malarkey. But to believe it you need to suspend reality; the stock is easily borrowed (in a short sale you borrow shares and sell them, betting you can replace them later as the stock goes down) thus the potential of a short squeeze is about as low as President Biden giving a coherent press conference.

Yet they’ve sold this conflicting and idiotic BS yarn to a gaggle of gullible reporters and maybe even SEC chief Gary Gensler, who is making noise he wants to crack down on all manner of alleged trading abuses cited by the Apes.

I know Gary needs some friends as Congress is on the verge of turning red, making his push into corporate wokeism all the more difficult. But if he were playing it straight, he would look deeper into the AMC imbroglio, leaving the short sellers and the major traders out of his investigation, at least for the time being.

He would then focus on a possible garden-variety pump-and-dump, something that would make “Wolf of Wall Street” Jordan Belfort proud: hucksters spreading BS so thick that they lure average people looking to make a quick buck into teetering movie-theater-chain stock with promises that its shares are going to the moon.

And when it obviously doesn’t, they sell and pocket their winnings. Again, I’m not comparing the Apes to fraudsters, but what’s going on with the stock sounds like something that used to spark one of those patented SEC investigations.

Let’s see if Gary can take a break from investigating corporate America’s carbon footprint and look into how small investors may be getting ripped off.

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