Are you still chasing AMC stock?
If so, are you dizzy enough yet?
With another huge development almost daily, this stock is nuttier than a squirrel.
At this point, the AMC has received more media attention for being a meme stock than it ever did as a movie theater.
And they’re going to ride this wave into the rocks.
Unfortunately, a lot of investors chasing media buzz will likely crash right along with them.
If you’ve been around awhile, you know I’m not a huge fan of Bitcoin.
I think it’s a bubble that will eventually pop.
But this AMC situation is a different animal altogether.
At least Bitcoin has underlying tech that might help it survive after all of the hype dies down.
AMC just continues to grow, with all flash and no real substance to justify the spike in valuation.
The stock is up more than 2,800 percent this year thanks to the meme stock effect, pushing its valuation to above $31 billion. It was worth $400 million last year.
And the company is clearly cashing in on the hype.
Just last week, AMC announced that it plans to sell 11.5 million new shares.
This week, several company bigwigs took the hint and followed suit, all the way to the bank.
Board members sold nearly $4 million in shares, cashing in on the company’s latest rally.
Three members of the board of directors each dumped shares worth more than $800,000, while two more members sold shares worth more than $700,000 each.
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These company insiders are either taking advantage of the hype for a quick but massive profit, or they see the bubble popping soon.
I think the latter, particularly because after AMC announced plans for the selloff, in the same breath they warned retail investors about the dangers of purchasing the stock.
They had this to say in last week’s filing with securities regulators:
“Under the circumstances, we caution you against investing in our Class A common stock, unless you are prepared to incur the risk of losing all or a substantial portion of your investment.”
Even they don’t have faith in this thing.
They’re literally admitting that there’s no underlying value in the stock.
I don’t know how much more proof we need.
When this crazy ride finally comes to a screeching halt, there are going to be a lot of hurt investors left holding the bag.
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I like those odds a lot better than chasing a meme stock bubble.
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