AMC tells investors to prepare to lose all their money if they buy the stock amid its epic rally

• Even AMC thinks its stock is overvalued, according to an SEC filing.
• The company told investors that they should invest only if they're prepared to incur massive losses.
• "We caution you against investing in our Class A common stock," AMC said in the filing.
• Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

AMC Entertainment's announcement on Thursday that it could sell up to 11.6 million shares came with an unprecedented warning to prospective investors: Be prepared to lose most, if not all, of your investment in our company.

The movie-theater chain has experienced a dizzying rally in recent weeks, briefly soaring to more than $70 and generating a year-to-date return of as much as 3,325% as retail traders piled into the name. At a $30 billion valuation on Wednesday, AMC was worth more than Best Buy.

CEO Adam Aron is taking advantage of the meteoric rise, having raised hundreds of millions of dollars already this week. The company sold $230 million worth of shares to the hedge fund Mudrick Capital on Tuesday, and hundreds of millions more could flow onto the company's balance sheet depending on the pricing of its latest share offering.

But AMC is aware that its stock is likely overvalued, given that the pandemic ravaged its business and that the company hadn't been profitable before then.

"We believe that the recent volatility and our current market prices reflect market and trading dynamics unrelated to our underlying business, or macro or industry fundamentals, and we do not know how long these dynamics will last," AMC said in a Securities and Exchange Commission filing on Thursday.

AMC also warned against investing in the company unless investors are prepared to lose all their money.

"Under the circumstances, we caution you against investing in our Class A common stock, unless you are prepared to incur the risk of losing all or a substantial portion of your investment," the filing said.

That risk was apparent in early-Thursday trades, as the stock plummeted as much as 34%, to $41.25.

Read more: Morgan Stanley identifies 28 underappreciated, high-quality stocks to own as the market's most expensive names are due to continue underperforming