Shares of AMC Entertainment (AMC -2.83%) are rising 5% higher as of 11:05 a.m. ET on Thursday on no company-specific news, but rather in sympathy with fellow meme stock GameStop (GME -5.04%), which has been putting on a clinic of double-digit gains over several days.
Although there is no news to account for the video game retailer's rise, meme stocks often rise in tandem with one another. GameStop has been the most talked-about stock on the WallStreetBets subreddit, so that AMC is riding its coattails is not a surprise.
What keeps meme stock traders animated is the hope that a massive short squeeze will send shares soaring. AMC's stock is still highly shorted with over 20% of its shares outstanding sold short. In fact, the latest report indicates short interest in the movie theater chain's shares actually increased in the most recent period to 109 million shares, a greater than 8% increase (GameStop's shares sold short jumped nearly 12%).
Yet any appreciable short squeeze has failed to materialize, so there has been more hope resting upon an improved movie business to lift the stock. While the movie box office has dramatically increased from last year, that's not all that remarkable and it is still below 2019's level.
Like GameStop, the theater operator has failed to hold onto whatever gains it makes after similar rallies. Any step forward is usually met with at least two steps backward.
So even though AMC Entertainment has jumped sharply from time to time this year, its shares are down 23% from where they were last month and 33% below where they stood three months ago. Investors shouldn't expect today's gains to hold for very long, either.