How to short AMC shares

US cinema chain AMC is the latest meme stock and is now absurdly overvalued, says Matthew Partridge, Here's how to play it.

AMC IMAX cinema
The group operates 1,000 cinemas across the world
(Image credit: © Getty Images/iStock)

One of the key trends of the past six months has been the rise of “meme stocks” – shares that have soared as a result of being promoted on the wallstreetbets forum on Reddit, or other similar sites. The most prominent of these is GameStop, which is still trading at over ten times the level it had reached on 1 January 2021; at one stage this year it was up by nearly 3,000%. The other company that has recently become a meme stock is US cinema chain AMC Entertainment Holdings (NYSE: AMC), currently up approximately 25-fold from its level at the start of the year.

Given that AMC makes its money from operating 1,000 cinemas across the world, mainly in the United States and Europe, it is no surprise that the company’s shares have bounced. Countries around the world have loosened Covid-19 restrictions that had previously forced cinemas to close or operate at reduced capacity. Indeed, around half of US states have effectively removed all restrictions.

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Dr Matthew Partridge
Shares editor, MoneyWeek

Matthew graduated from the University of Durham in 2004; he then gained an MSc, followed by a PhD at the London School of Economics.

He has previously written for a wide range of publications, including the Guardian and the Economist, and also helped to run a newsletter on terrorism. He has spent time at Lehman Brothers, Citigroup and the consultancy Lombard Street Research.

Matthew is the author of Superinvestors: Lessons from the greatest investors in history, published by Harriman House, which has been translated into several languages. His second book, Investing Explained: The Accessible Guide to Building an Investment Portfolio, is published by Kogan Page.

As senior writer, he writes the shares and politics & economics pages, as well as weekly Blowing It and Great Frauds in History columns He also writes a fortnightly reviews page and trading tips, as well as regular cover stories and multi-page investment focus features.

Follow Matthew on Twitter: @DrMatthewPartri