What's going on?

AMC Entertainment hit a nearly $30 billion valuation early on Thursday, making the theater chain superstar bigger than half the companies in the key US stock market index.

What does this mean?

AMC�s stock is up around 400% this week and over 2,800% this year alone, but it�s hard to put this rally solely down to Redditors (tweet this). The bigger a company, after all, the tougher it is for retail investors � whose wallets are a lot smaller than their institutional counterparts� � to influence its value.

Then again, they do have the means to tussle with the heavy-hitters: retail investors have leverage and call options at their fingertips, both of which amplify the impact of small bets. And given how quickly �short sellers� � investors betting AMC�s price will fall � were losing money earlier this week, they might�ve raced to buy shares in hopes of reversing their bets and limiting their losses. That, in turn, would�ve pushed AMC�s stock even higher.

Why should I care?

For markets: AMC is making hay while the sun shines.

AMC has been taking full advantage of the hype around its stock: the company�s been selling new shares at their recently bolstered price, and it just announced it�d be selling almost 12 million more in due course. And you can�t exactly blame the firm, which has been hemorrhaging cash since the pandemic forced its theaters shut. Now that its coffers are refilled, though, it should be better able to bounce back as things reopen.

Zooming in: AMC�s valuation is hard to justify.

AMC�s shares are currently trading for approximately 12 times next year�s forecasted sales, compared to US rivals Cinemark and IMAX�s 3 and 5 times respectively. But that lead probably isn�t sustainable: Goldman Sachs said on Wednesday that the short-term boost from a recovery has already been factored into cinema stocks, and that the acceleration toward streaming platforms will crimp earnings in the longer run.