“The Apes Will Eventually Cash Out”: AMC Downgraded To $7.50 Price Target By Wedbush
Shares of meme stocks will likely be on watch today after a Wedbush downgrade of AMC Entertainment. The investment bank makes the case that the self-proclaimed “apes” that have been buying AMC at the company’s breakneck $21 billion market cap will eventually subside.
AMC shares are down about 1.5% with about an hour and a half to go until the cash open. If the shares stay red on Thursday, it will break a five day winning streak that may have been helped along by short seller Marc Cohodes disclosing on Twitter that he bought 50,000 shares of the name on Tuesday.
Ha ! I bought 50,000 $AMC this am. for I think too many people are Short it and Will watch carefully @TaraBull808 @TradingTigre I am not messing around on this Citadel thing either https://t.co/qx76mbqSTw pic.twitter.com/ojGBbIa61M
— Marc Cohodes (@AlderLaneeggs) November 2, 2021
Wedbush analyst Alicia Reese, however, thinks the “apes will eventually cash out”, as she wrote in her note. Despite this, she said she “remains optimistic about the exhibition industry as attendance starts to rebound,” according to Bloomberg.
Her 2023 EBITDA estimates used to arrive at her price target was based on “optimistic margin and box office assumptions” and she says that volatility in shares will likely continue as long as it remains a favorite by momentum traders in places like r/WallStreetBets.
Wedbush’s price target represents more than 80% downside from the stock’s current levels.
WEDBUSH: “We downgrade shares of $AMC to UNDERPERFORM on our assumption that ultimately the majority of retail ownership will eventually cash out and move on .. Volatility .. is likely to continue, driven by trading momentum unrelated to AMC’s fundamentals ..”
— Carl Quintanilla (@carlquintanilla) November 4, 2021
Thu, 11/04/2021 – 09:46