Why I didn't Buy AMC Stock
🩳 Since I've been investing in GameStop $GME in 2019 and talking about the short squeeze, people have been suggesting that I look at other stocks with high short interest. One of these was AMC $AMC . AMC is undergoing a short squeeze and returns YTD exceed that of GameStop. However, the 3300% profits I made from GameStop are not likely to happen with AMC.
🚀 The reason why I invested in GameStop in September 2019 was because it was a deep value stock, a cigar butt stock. The company had more cash than market capitalization with low debt and they were buying back shares. They were able to buyback 35% of the shares outstanding in a quarter. This created a new catalyst, over 100% of shares outstanding were short and a short squeeze was inevitable when the new console cycle would have started. That's why I made GameStop the largest position in my portfolio. It took me 14 months, but I was right.
🎥 With GameStop, the short squeeze was inevitable. it would have happened when the short sellers would have been forced to buyback shares when the new console cycle began. It was backed by fundamentals. Wallstreetbets had very little to do with it. With AMC, this is different, the company doesn't have the same catalyst and is not that heavily shorted. The short squeeze is happening.
AMC is in no way a value stock. They have huge debt with a negative book value. They have been issuing shares to raise capital as opposed to GameStop buyingback shares.
💰 The reason I invested in GameStop was because of the fundamentals. The short squeeze was just a bonus. We can say the same things about UNFI $UNFI . A short squeeze is currently happening. But AMC doesn't have these fundamentals. The short squeeze is based on pure speculation and over the long-term, speculators always lose money.
Watch the full video on YouTube:
Full analysis of AMC: https://ishfaaqpeerally.teachable.com/courses/662813/lectures/32880958
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