Shares of AMC Entertainment (AMC 9.18%) are sliding 4.5% at 10:41 a.m. ET on Tuesday. There was no news specific to the theater operator, but the drop continues the trend lower it has seen over the past week.
After hitting a recent high of $29.44 per share on March 29, AMC's stock has given up about a quarter of the gains it made on the announcement that the company was investing in a gold and silver miner. The news pushed the stock out of the doldrums it had been in for months as traders anticipated that the "mother of all short squeezes" (MOASS) had arrived, but the upward momentum quickly stalled and now it's resuming its downward trajectory again.
It did seem possible a short squeeze could occur. With over 20% of AMC's stock being sold short, the sudden surge in price had the potential to cause short-sellers to cover their position, helping to fuel a further rise in the price and leading other shorts to cover their position.
In fact, much of the investing thesis in AMC has rested on a MOASS occurring, though that always seems to be just over the next hill.
Unfortunately, the fundamentals don't justify an investment in the theater operator just yet. Attendance remains down compared with pre-pandemic levels, and fewer movies are scheduled to be released this year by studios.
AMC and other movie theater stocks did secure some important concessions from movie studios to exclusively release movies into theaters before showing them on streaming services. But it did not cover all films and streaming companies like Disney remain a threat to the health of theaters.