Is AMC Entertainment Holdings (AMC) stock catching a ride to the Moon?

AMC Entertainment Holdings ' ( AMC -10.39%) stock is catching a ride to the moon on the back of a group of investors that discuss stocks on Reddit. The stock is up an incredible 2,800% year to date.

Does Reddit's tug of war really help AMC?

Instead of focusing on company fundamentals, the group from Reddit is focused on forcing a short squeeze, where heavy buying activity in a stock counters those who are betting against (or shorting) the stock. Intentionally or otherwise, this tug of war achieved by Reddit investors has fundamentally helped AMC.

Does AMC have a long-term business model?

Many of the retail stock traders had assembled on Reddit threads including r/WallStreetBets, where an influential post made the case for AMC’s long-term business model and encouraged readers to put the squeeze on Wall Street firms that had shorted the stock.

What's the irony about AMC's stock rally?

Here's the cruel irony: The bulk of the stock's rally took place after it raised capital. Imagine the financial position that AMC could be sitting in if it had sold stock a few days later at $17 per share, rather than at $4.81 per share. It was the difference between raising $304.8 million and $772.45 million.