What happened
Shares of AMC Entertainment (AMC) were giving up about 2.7% of their value in morning trading Wednesday, following their meteoric rise over the past few days on the weekend box office success of the new movie Spider-Man: No Way Home.
AMC stock gained 19% on Friday with the film's debut, then added another 2% on Monday and again on Tuesday. It was the largest opening for a film in the pandemic era and second on the all-time list behind Avengers: End Game in 2019.
Image source: Getty Images.
So what
Taking a breather after big runs higher is not surprising, especially for leading meme stock AMC, which is the best-performing stock in the market in 2021 with gains of almost 1,330% this year.
AMC is still a heavily shorted stock, with over 16% of its float sold short. Many just don't believe the theater operator's business justifies its valuation, while its retail investor supporters continue to look for a short squeeze to send the stock even higher. With just 1.2 days to cover their positions, however, the likelihood of a squeeze seems small.
Now what
AMC is still working to recover its business and pay off the massive debt it accumulated over the past two years. According to its last earnings report, October attendance had returned to 70% of its 2019 levels, which means No Way Home could allow December's totals to exceed the two-year stack.
While AMC stock rarely trades on the business fundamentals, instead generally relying mostly on internet chat room chatter for support, the two combined because of positive developments in the industry could be a powerful force to push the movie theater stock higher.
