AMC also is planning a 10-to-1 reverse stock split of its common stock on Thursday. AMC Entertainment shares plummeted more than 20% on Tuesday, slipping to a new 52-week low of $2.46 per share, as investors brace for a stock conversion later this week. But shares likely plunged on the dilution effect that the conversion brings. Over a two-day period on Sept. 6-7, the stock fell a combined 43% after the company announced a plan via a filing to the Securities & Exchange Commission to sell up to 40 million in additional common shares. “The continued decline in AMC shares … is likely due to investors focusing on the strong possibility that AMC begins issuing large amounts of equity to address the debt balance,” Eric Wold, an analyst at B.

AMC previously reached memestock status in 2021 when Reddit retail traders bought up the stock while it was heavily shorted. Since then, AMC has capitalized on the stock’s newfound notoriety by regularly issuing new shares to raise capital. That attitude helped AMC survive the pandemic, but now, investors have had enough. Not all breakouts work, especially when the stock market uptrend goes under pressure or into a correction. When IBD notes the market in a confirmed uptrend, it signifies that buying demand is healthy among institutional investors. Strong future profits could lead to increasing accumulation by large funds and other institutional investors.

1. In short – it makes sense why AMC is still forging ahead with its share sale plans despite a relatively positive earnings beat.
2. Shares of the company have nearly halved since it was announced on Aug. 14 that the APE shares would be converted.
3. The CEO has repeatedly warned that AMC faces liquidity challenges.
4. This followed several other exchange agreements in December, and AMC completed a $350 million at-the-market equity offering in December as well.

The most oversold stocks in the communication services presents an opportunity to buy into undervalued companies. A more straightforward question to answer might be, what isn’t happening? Before this week’s announcement, a flurry of activity in AMC stock in recent weeks has left investors uneasy. Check the daily price-weighted performance of all IBD industry groups, plus rankings based on six-month performance, at IBD Data Tables. AMC’s movies industry group shows a decent ranking lately, at No. 67 among IBD’s 197 industry groups in terms of six-month price-weighted performance.

Current projections from Wold show AMC is unlikely to move into positive free cash flow territory until 2025, so having additional liquidity is necessary for the company’s immediate future. Shares of AMC Entertainment Holdings Inc. continued their slide Tuesday, hitting a record intraday low and another record-low close. Dow Jones Industrial Average, S&P 500, Nasdaq, and Morningstar Index (Market Barometer) quotes are real-time. “We think AMC is well-positioned against an improving industry backdrop,” said Reese, in the note, adding that Wedbush expects North American box office to end up 20% higher than 2022. Unfortunately, shares have nose-dived below this year’s earlier low of 33.27. And AMC will definitely need weeks, if not months, to build the right side of that new base in bullish fashion.

AMC, Cal-Maine Foods, Li Auto, SoFi Technologies, Tesla: Why Are These 5 Stocks On Investors’ Radars Today

But the stock is now down in 10 of the past 11 trading days and has fallen more than 17% during its current five-day losing streak, according to Dow Jones Market Data. AMC’s recent market performance reflects the demise of the movie-theater chain’s meme-stock status. AMC CEO Adam Aron described the court’s approval as a “significant milestone” in a letter to investors earlier this month. “Knowing that we can do our best for AMC to smartly raise capital is a terrific relief,” Aron said.

Analyst Ratings

Short sellers, betting on a decline in the stock, at some point may have to do a sudden about-face. In January 2021, WallStreetBets chat-room traders on Reddit joined in unison in buying shares and bullish call options in AMC stock. They did the same in a band of other companies that had been heavily sold short and struggling. Volume skyrocketed to 84.9 million shares during the Sept. 6 sell-off — a clear sign that institutions unloaded shares. Turnover jumped to the highest amount so far this year and almost eight times the stock’s average turnover over the past 50 sessions.

AMC had previously collaborated with “top confectioners” for over a year in order to create its chocolates. Next year, the company has plans to expand its selection of sweets. According https://broker-review.org/ to data from Benzinga Pro, AMC Entertainment has a 52-week high of $91.50 and a 52-week low of $7.05. Get this delivered to your inbox, and more info about our products and services.

Going Into Earnings, Is Microsoft Stock a Buy, a Sell, or Fairly Valued?

Set against this backdrop, Wedbush raised its AMC (AMC) price target to $19 from $2 Thursday. “AMC’s court case resolution removes a significant overhang, and we expect AMC shares to settle around our new $19 price target post-conversion and post-reverse-stock-split,” said Wedbush analyst Alicia Reese, in a note. The units had only been publicly traded on the New York Stock Exchange for a year, and the conversion only went ahead after a settlement was reached with its shareholders. Under the agreement, AMC will provide an estimated $129 million of stock to common shareholders to nix any legal claims about the stock conversion plan in the bud. Despite a strong latest quarterly earnings beat, AMC is still struggling to stay afloat – and is being pretty open about its financial woes.

Outlook for the Stock Market and Economy

The beleaguered cinema chain AMC Entertainment has announced plans to sell more of its common shares. The ‘at the market’ offering program will sell up to 40 million shares of class A common stock, with Citigroup Global Markets, Barclays Capital, B. Riley Securities, limefx and Goldman Sachs facilitating the sale. These preferred equity units are a workaround, of sorts, and free AMC up to sell additional units of stock after investors who feared dilution rejected the company’s efforts to issue additional stock last year.

‘Worn-out’ investors are contributing to AMC’s stock slide, Stocktwits says

This puts Adam Aron in the bottom 25% of approval ratings compared to other CEOs of publicly-traded companies. The company is scheduled to release its next quarterly earnings announcement on Tuesday, February 27th 2024. Sign-up to receive the latest news and ratings for AMC Entertainment and its competitors with MarketBeat’s FREE daily newsletter. 1962 is marks a major milestone for the company because it is taken over by Stanley Durwood who embarks on a mission of rapid expansion. The company now commands more than 30% of the global market share with only 5% of the total screens and it has been a ground-breaking business in many respects.

That hasn’t helped the share price recover, nor does it look set to do so anytime soon if AMC plans more share sales. AMC Entertainment’s stock reverse split before market open on Thursday, August 24th 2023. The 1-10 reverse split was announced on Monday, August 14th 2023.

Three years ago, AMC went from a beleaguered pandemic victim to a meme-stock phenomenon. Boosted by the r/WallStreetBets crowd on Reddit, AMC parlayed a steep rise in its share price to tap into equity and debt markets, raising $917 million in January 2021. AMC’s 2023 decline is primarily attributed to a strategic move made by the company in August, which involved implementing a 10-to-1 reverse stock split. Additionally, during the same period, the company’s AMC Preferred Equity Units, previously traded as APE, were converted into common stock. Things are looking up for AMC after a strong quarter ahead of the summer blockbuster, which should be reflected in its Q3 results later this year.

AMC Entertainment NewsMORE

That is, a holder of 10 shares of AMC now owns just one share, but the share price got multiplied by 10. The company on Aug. 18 issued a new 8-K filing to the SEC with details on the conversion of the APEs. The conversion resulted in the trading of a single class of AMC shares and the completed 1-for-10 reverse split of common shares. On Jan. 7, AMC announced that the Eras Tour movie officially became the highest grossing film in box office history in the concert and documentary film category, achieving $262 million in ticket sales to date.

For the very aggressive trader, this trendline breakout near 15 offered an uber-speculative entry. The Accumulation/Distribution Rating has fallen to a negative D grade on a scale of A to E. A grade of C+ or higher points to institutions, on net, accumulating shares. The RS Rating runs from 1 to 99; for investors selecting top growth stocks, the higher the RS Rating, the better the stock in general. When choosing growth stocks for the biggest potential gains based on the key elements of IBD’s growth stock investing paradigm, focus on those with a Composite Rating of 90 or higher. Shooting for a 95 or higher, particularly at the start of a new bull market, is even better.