What happened

Even a blind squirrel occasionally finds an acorn, and that seems to be what's happening on Tuesday with movie theater chain AMC Entertainment Holdings (AMC -5.17%) and its preferred shares, AMC Preferred Equity (APE). Both stocks were moving about 6% higher at 11:38 a.m. ET on a day when the S&P 500 is up 48 points, or about 1.3%.

Because there was no news to account for the sudden move higher, chalk it up to the occasional acorns that AMC's squirrels -- or "apes," as they like to refer to themselves -- found today. The theater chain's stock often moves higher on no news, only to quickly give it all back. Shares are down 63% in 2022.

$20 bill paper airplane crumpling into stock pages of newspaper.

Image source: Getty Images.

So what

AMC is still heavily shorted, with almost 20% of its shares outstanding sold short. But with a short interest ratio of just 2.4 (anything over 7 is considered a lot), the likelihood of a short squeeze is negligible. 

The company has become the leading meme stock these days as its investors continue looking for the mother of all short squeezes to occur. They had pinned their hopes on AMC creating the preferred shares to trigger the squeeze, but the combined price of the two share classes (around $9.50) puts them almost 50% below AMC's $18 share price the day before the split occurred. 

Now what

The purpose of AMC Preferred Equity was to allow the movie theater chain to dilute the stock in a bid to raise extra cash if needed. With the APE shares down 75% from their launch, it's doubtful AMC will raise all that much if and when it tries to.

There have been few big tentpole movies released to help lure people back to the theaters, and attendance figures are running well below pre-pandemic levels. Both iterations of AMC stock will have a rough go of it unless the film industry bounces back.