Cash Live
    Trending
    • FCC authorizes SpaceX to provide mobile Starlink internet service to boats, planes and trucks
    • RH shares slide after company lowers its outlook for the year
    • FTX closes in on a deal to buy embattled crypto lender BlockFi for $25 million in a fire sale, source says
    • Winning ticket for Powerball’s $366.7 million jackpot sold in Vermont. Here’s the tax bite for the winner
    • Investors see little to be gained in stocks the rest of the year, favor dividend payers now, CNBC survey shows
    • This common money move costs retirement savers $45.5 billion in investment fees, earnings over 25 years
    • Overturning Roe v. Wade could have long-term financial impacts on people who are denied abortions, research shows
    • Spirit delays shareholder vote on merger hours before meeting to continue deal talks with Frontier, JetBlue
    • Personal Finance
    • Investing
      • Investing
      • Advisors
      • Investor Tips
    • Earnings
    • Business
      • Business
      • Small Business
    • Finance
      • Finance
      • Wealth
    Cash Live
    Home»Investing»Interactive Brokers founder: Don’t short AMC, meme stocks — they can soar to ‘unimaginable highs’
    Investing

    Interactive Brokers founder: Don’t short AMC, meme stocks — they can soar to ‘unimaginable highs’

    June 8, 2021No Comments3 Mins Read
    104905097 RTR4YNH4
    Share
    Facebook Twitter LinkedIn Pinterest Email

    Interactive Brokers Group, Inc. Chairman and CEO Thomas Peterffy.
    Mike Segar | Reuters

    Interactive Brokers founder and chairman Thomas Peterffy on Monday issued a warning to investors betting against so-called meme stocks like AMC Entertainment.

    “It is extremely tempting to short these stocks, but unless you have huge liquid resources, please try to resist the temptation because these prices can go to unimaginable highs before they settle down to a reasonable valuation, and you may have to cover on the high point,” the online brokerage pioneer said in an interview on CNBC’s “Squawk Box.”

    Shares of AMC soared more than 20% on Monday after rising 83% last week alone despite declines on Thursday and Friday. The stock has gained about 2,500% in 2021.

    “On the long term, stocks always approach their fundamental values, which in this case is much, much lower,” Peterffy said, acknowledging that’s why short-sellers see an opportunity in certain stocks such as AMC that have soared in price after becoming favored by Reddit traders.

    Shorting a stock is a bearish strategy in which an investor borrows shares and then promptly sell them, expecting the price to fall. When that happens, the short-seller buys back the stock at its lower level and returns the borrowed number of shares, profiting off the difference. If the opposite transpires, a short may try to limit their losses by buying back the stock at higher prices.

    Peterffy’s comments after a wild week of trading in AMC and a few other companies such as Bed Bath & Beyond and BlackBerry. While GameStop attracted the most attention in the epic WallStreetBets’ short squeeze in January, when the Reddit-driven trading frenzy first took hold, AMC has seen its profile — and share price — rise in recent weeks.

    The movie theater chain, which was hit hard by the Covid pandemic, has taken advantage of the retail investor enthusiasm by selling additional shares to raise money. AMC also has launched initiatives targeted at its retail investors, such as exclusive screenings.

    Despite AMC’s efforts, Peterffy said the company still has a challenging road ahead to justify its valuation and suggested long investors who want to buy and hold the stock should stay away, too.

    “If you’re willing to sit there and hold a stock at $200, $300, $400 a share that keeps making no money … it’s impossible that these prices can hold up at that level because more and more people will be short it,” he said.

    “Eventually these stocks will go back to their value which is roughly single-digit dollars, even if that,” he added. “On the long run, the longs will lose their money, So while you may try to catch a sudden drift upward as a trader, I would recommend against being long on these stocks.”

    This article was originally published by Cnbc.com. Read the original article here.
    “Cryptocurrency
    fqw82np

      Related Posts

      Investors see little to be gained in stocks the rest of the year, favor dividend payers now, CNBC survey shows

      June 30, 2022

      Top Wall Street analysts stand by these stocks as the first half of 2022 wraps up

      June 26, 2022

      Coinbase shares fall after rival Binance.US drops spot bitcoin trading fees

      June 22, 2022

      Top Wall Street analysts say these are the best stocks to beat the volatile market

      June 19, 2022
      Add A Comment

      Leave A Reply Cancel Reply

      Signup for our Newsletter
      Advert
      Categories
      • Advisors
      • Business
      • Earnings
      • Finance
      • Investing
      • Investor Tips
      • Personal finance
      • Small Business
      • Wealth
      Signup for our Newsletter
      Advert
      Uselful links
      • Contact
      • About us
      • DMCA / Copyrights Disclaimer
      • Privacy Policy
      • Terms and Conditions
      • Cookie Policy (US)
      • Cookie Policy (EU)
      ARCHIVES
      © 2022 Designed and Powered by JL Digital webbyrå.

      Type above and press Enter to search. Press Esc to cancel.

      Manage Cookie Consent
      To provide the best experiences, we use technologies like cookies to store and/or access device information. Consenting to these technologies will allow us to process data such as browsing behavior or unique IDs on this site. Not consenting or withdrawing consent, may adversely affect certain features and functions.
      Functional Always active
      The technical storage or access is strictly necessary for the legitimate purpose of enabling the use of a specific service explicitly requested by the subscriber or user, or for the sole purpose of carrying out the transmission of a communication over an electronic communications network.
      Preferences
      The technical storage or access is necessary for the legitimate purpose of storing preferences that are not requested by the subscriber or user.
      Statistics
      The technical storage or access that is used exclusively for statistical purposes. The technical storage or access that is used exclusively for anonymous statistical purposes. Without a subpoena, voluntary compliance on the part of your Internet Service Provider, or additional records from a third party, information stored or retrieved for this purpose alone cannot usually be used to identify you.
      Marketing
      The technical storage or access is required to create user profiles to send advertising, or to track the user on a website or across several websites for similar marketing purposes.
      Manage options Manage services Manage vendors Read more about these purposes
      View preferences
      {title} {title} {title}