Jim Cramer Sides With The Apes, Says AMC Entertainment Stock Is A 'Terrible Short': 5 Other Short Squeeze Candidates On His Radar
Benzinga
Published Aug 10, 2022 17:33
Updated Aug 10, 2022 18:10
Jim Cramer Sides With The Apes, Says AMC Entertainment Stock Is A 'Terrible Short': 5 Other Short Squeeze Candidates On His Radar
Jim Cramer doesn't hold anything back when he engages with retail investors on Twitter (NYSE:TWTR). He has often been critical of some of the most popular stocks among the retail crowd, but he seemed to side with the "apes" this time around.
Cramer highlighted several short-squeeze candidates Tuesday night on CNBC's "Mad Money."
"Lately we've seen a lot of low quality stocks rally, purely because too many hedge funds shorted them at the same time," Cramer said. "And those shorts end up getting squeezed."
What To Know: Squeezes became a hot topic following unprecedented moves in AMC Entertainment Holdings Inc (NYSE: AMC) and GameStop Corp (NYSE: NYSE:GME) last year.
The names on Cramer's list include Bed Bath & Beyond Inc (NASDAQ: BBBY), Upstart (NASDAQ:UPST) Holdings Inc (NASDAQ: UPST), Beyond Meat Inc (NASDAQ: NASDAQ:BYND), Wayfair Inc (NYSE: W) and, of course, AMC and GameStop.
Cramer warned that Bed Bath & Beyond is one name to avoid. After bouncing off the lows below $5 per share, the stock surged above $13 in just a couple of days. That type of move sets the company up for an offering, Cramer said.
"Of course if they start issuing new shares, that resolves the short squeeze and sends the stock lower," he said.
Related Link: Troubled Bed Bath & Beyond Is The Target (NYSE:TGT) Of A Short Squeeze, Reddit Hype
Upstart is another stock that has surged in recent weeks, but Cramer said he "gasped at how bad" the company's earnings report was this week.
"Just Like Bed Bath, there's no price where I'd be willing to own Upstart," Cramer said.
Beyond Meat is another stock that has run over the last month or so, but the move is simply a result of high short interest in the name, Cramer said.
"Beyond Meat's fundamentals are beyond awful, and the whole run here was about the short squeeze," he said.
Cramer also highlighted Wayfair. The "Mad Money" host isn't a fan of the stock, but the shorts are starting to get a bit crowded in the name, which means the stock can only go so low before it finds a floor, he noted.
"I don't like it even after today's $12 decline, but if you try to bet against it, you'll probably get squeezed," Cramer said.
He also sees some squeeze potential in GameStop and AMC. When it comes to the former, the company has a large cash position and a 23% short position against it, he noted.
Although he acknowledged the stock is overvalued at current levels, the company has the "financial flexibility to reinvent itself," Cramer said.
Get The App
"When you look at the core business of video game sales, GameStop probably deserves to be shorted ... but the company has that big pile of cash, it gives them what I call optionality," Cramer said.
Cramer painted a different picture around AMC. If there was one stock on the list that really stood out from the rest, it was undoubtedly the Adam Aron-led company.
"You think I'm gonna come out negative, don't you? The movie-theater chain run by Adam Aron. Now wait a second," Cramer said.
"Here's a case where the company reported better-than-expected revenues and a whopping 59 million in attendance versus 22 million last year. Here's one where the fundamentals are getting better ... to me it's clear that AMC is off the critical list."
Cramer highlighted AMC's announcement regarding a special dividend of AMC Preferred Equity. He applauded Aron for coming on CNBC and explaining the dividend is not dilutive.
"All I can say is AMC is truly doing better, which makes it a terrible short — [a] rare case where the 'short busters' have the fundamentals on their side" he emphasized.
See Also: 5 Short Squeeze Stocks That May Soar: ToughBuilt, Blue Hat And This Streaming Company
Photo: DonkeyHotey from Flickr.
© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Read at Benzinga
Read the original article on Benzinga
Written By: Benzinga
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.