Hey Gotraders,
I am sure you have heard by now that AMC (AMC) stock skyrocketed last night. I am not talking about a 20%, 50%, or even a 70% increase. I am talking about a whopping 95.59% increase in its stock price overnight!
The stock closed at $31.90 on Tuesday. And it closed at a record $62.55 yesterday! Unbelievable!
According to S3 Partners, around 20% of the floated shares of the company are sold short. The dramatic price increase could be due to a short squeeze in the stock.
What is a short squeeze? A short squeeze occurs when there is a large number of short positions in a particular stock (in this case, AMC). Short position holders profit from a decline in the stock price. Since AMC has been talked up by a number of people active on Reddit boards, any large increase in the price of the stock can have a large impact on those short position holders and, in some cases, losses are magnified when the position moves against them as short positions are established using leverage. To prevent losses, short position holders close out their shorts (known as short covering), which is done by entering a buy order. That buy order, along with all the other normal buy orders, drives the price up further, which causes more unwinding of short positions through more buy orders! With the significant volume in AMC, you can see how the shorts can get squeezed out. 🤕
Trading of the stock was halted several times as it soared to new heights. More than 710 million shares were exchanged yesterday, which is nearly double the number of shares that AMC has outstanding! Investors should be mindful that high volatility can result in large price swings (both up and down). Investors must always be aware that they can potentially make a lot of money, but can also potentially lose a lot of money!
Why is this important? AMC stock is up more than 2,800% year to date! AMC recognizes that part of its massive surge in stock price has been due to the mania caused on social media. AMC is trying to capitalize on this and wants to reward its retail investors with free popcorn, and exclusive movie screenings. They want to use the meme frenzy as a “springboard for growth.” 🤦 Let’s see how that works out for them!
📈 Oil continues to rally 🛢️
Oil continues to rally and analysts expect the price to reach $80 a barrel by the summer, and even hit $100 in the next few years! The increase in oil prices is due to increased demand as some economies open up.
“We think in the next three years we could see $100 barrels again, and we stand by that. That would be a 2022, 2023 story” - Francisco Blanch, Global Commodities and Derivatives Strategist at Bank of America (BAC).
To invest in oil, here are some ETFs and stocks to consider: VanEck Oil Services ETF (OIH), iPath Oil ETN (OIL), SPDR S&P Oil & Gas Exploration ETF (XOP), Schlumberger (SLB), Cabot Oil & Gas (COG), Imperial Oil (IMO), Marathon Oil (MRO).
📈 Apple app store brings in revenues of over $600 billion 💰
Apple’s (AAPL) app store brought in $643 billion in revenue through iPad and iPhone apps in 2020. Cha-ching!
The revenue can be broken down into the following:
$511 billion - sales of physical goods and services through apps (including $383 billion from retail apps, $38 billion through travel apps, and $36 billion from food delivery and pickup)
$86 billion - digital goods and services
$46 billion - in-app advertising
Stocks of Apple are up 53.86% over the last 1 year and closed at $125.06 yesterday.
Top movers & shakers 🎢
What else is making headline news 📰
Tesla (TSLA) recalls 6,000 cars over the risk of loose bolts.
Facebook (FB) announces new tools to make it easier for businesses and consumers to communicate.
Microsoft (MSFT) to unveil a new version of Windows on June 24.
Popular companies releasing earnings this week 💰
Thursday: Broadcom (AVGO), Crowdstrike (CRWD), Lululemon (LULU), Docusign (DOCU), Slack (WORK), Plug Power (PLUG), JM Smucker (SJM), Five Below (FIVE), Asana (ASAN), Manchester United (MANU)
A company’s market value may fluctuate considerably around the time that the earnings report is expected to be published. Stock prices may rise or fall according to analysts' speculative estimates, released prior to the actual earnings announcement.
The earnings season can be a time of great opportunity since better-than-expected figures could cause a company’s stock to greatly increase in value. Worse-than-expected results could have the opposite effect.
That’s all from us for now.
Signing out,
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The legal stuff 🤓
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