Rich Greenfield Explains His 1-Cent AMC Entertainment Price Target

The recent move in AMC Entertainment AMC has nothing to do with a short squeeze, Lightshed Partners analyst Rich Greenfield said Friday on CNBC's "Squawk Box."

What Happened: 680 million shares were traded Thursday, yet AMC Entertainment only has 450 million shares outstanding, Greenfield said.

"If hedge funds wanted to get out of their entire position, if they were short, they could do it within minutes," he said, adding that the AMC Entertainment price action does not point to big institutions or hedge funds being squeezed. 

See also: How to Buy AMC Stock

An "army of retail investors" claims they are going to buy, hold and refuse to sell, Greenfield said, adding that he finds the notion funny because "retail is selling to retail at ever higher prices," and some are making large amounts of money in the process. 

The AMC Outlook: The only thing that really matters long-term is that AMC Entertainment is "never going to make cash again," he told CNBC. 

Greenfield went on to criticize the company's capital structure and highlighted the obviously flawed valuation. 

Fair value is based on future cash flow, and AMC Entertainment can't generate cash flow, Greenfield said, adding that he has a 1-cent price target on the stock and believes the company is headed for bankruptcy. 

Related Link: Why AMC Entertainment Stock Is Soaring Today

AMC Price Action: AMC Entertainment is setting new 52-week highs in premarket trading today.

At last check Friday, the stock was up 13.57% premarket at $30.12. 

Photo by Dave Dugdale from Flickr.