I’ve just caught wind of some very exciting news that AMC Entertainment (NYSE: AMC) will be accepting Bitcoin as legal tender by the end of the year. As a shareholder of AMC, I’m eager to see if this move will lead to a rise in the AMC share price.
At the time that I’m writing this, Bitcoin has risen by around 36% in the last month. It’s clearly showing some great momentum at the moment. Here’s why I think accepting Bitcoin is a smart decision for AMC.
The Millennial factor
Traditional investors have realised that they can’t discount the influence of the Millennial share trader these days. Meme stocks such as GameStop and AMC are disrupting the usual state of play in the stock market today.
The community behind meme stocks is not only growing but is also linked strongly together on the r/wallstreetsbets forum. This means that speculation can be generated effectively.
In my opinion, you can see the battle between traditional investors and Millennial investors by looking at the possibility of a short squeeze occurring. As I covered in my last article on AMC, a short squeeze occurs when short sellers have to close their positions to cut losses when the share price refuses to fall. The American cinema chain is one of the most shorted shares on the market.
I also mentioned about how to time my investment correctly. I think the time has come, so I’ve added AMC to my portfolio after its plan to integrate Bitcoin payments.
Talking of what Millennial investors are interested in, I’m convinced that Bitcoin is something that sparks their interest. It’s another disruptive entity to the usual state of affairs. According to Harris Poll, 27% of people aged 18-34 prefer Bitcoin over regular stocks.
Of course I’m running on sheer speculation, but in the world of meme stocks, I think this has proven to be the ultimate moving force behind the AMC share price in general.
Meme stocks always come with a risk
I’m never going to invest a huge percentage of my portfolio into a meme stock. For me, it’s all fun and games with a small investment. The AMC share price is very volatile and it’s possible for me to lose a big percentage of my investment in a single day.
I think it also sensible to be wary of the fact that the company has been in debt for a considerable amount of time. And its debt rose to a total of $5.4bn by the end of 2020.
Is now the time to buy?
I will be holding my shares and am considering building my position a little further. I think that a short squeeze is a possibility and this could lead to surge in the AMC share price.
Now, there’s a possible future I could go to a cinema and pay for my ticket with Bitcoin. Could I think of anything more Millennial?
Admittedly, I’ve only invested a very small percent of my overall portfolio in AMC due to its unpredictable nature. But overall, this news has me very excited and my bet is that a lot of Millennials will be too. This is why I’m hoping for a rise in the AMC share price.
The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of investment advice. Bitcoin and other cryptocurrencies are highly speculative and volatile assets, which carry several risks, including the total loss of any monies invested. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.
John Town owns shares in AMC Entertainment Holdings. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.