AMC Entertainment is showing strong bullish sentiment as the stock respects the mid $20 levels.
The theatre chain might have underperformed the market on Monday but had a healthy average trading volume day of 46 million.
Today the stock is up more than 46% on the monthly chart.
Very soon shareholders are going to receive AMC’s new preferred equity, also known as APE stock.
So, what can we expect from AMC in the coming weeks?
Let’s discuss it!
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Shareholders prepare to receive APE
Shareholders are patiently waiting to receive APE stock, AMC’s upcoming dividend.
2022’s Q2 earnings call shocked Wall Street yet again as the company found a solution to raise more capital to pay off its debt.
AMC Entertainment is splitting AMC shares in half through APE (AMC Preferred Equity) since shareholders are not willing to dilute AMC shares.
This is providing AMC Entertainment with access to half of its investor’s capital should they need it down the road.
But owning APE has its perks for shareholders too.
It might provide shareholders with a proper share count exposing synthetic shares in the market.
As owners of the company, shareholders will also be able to trade the security which means the value of APE will be determined by market conditions after it shares half of its value from AMC.
While AMC’s share price will go down during the issuance of APE, this could provide investors with AMC Entertainment stock at a much greater discount.
In turn, big buying pressure could send AMC’s share price skyrocketing back up yielding bigger returns for shareholders.
Related: How Much Will APE Stock Be Worth?
Does AMC still have a chance at squeezing?
APE stock might divide AMC’s share price by half, but it doesn’t mean the short interest data has changed.
AMC is still heavily shorted which means the potential for a short squeeze is still there.
And when AMC’s share price gets split in half, the discount is going to be a steal.
But ultimately, it’s going to be up to retail investors to trigger MOASS.
That’s because it’s going to take momentum to trigger big price action, and only people and institutions going long on AMC can make that happen.
The strong bullish sentiment in AMC is pointing the company in the right direction.
The key is to not let off the gas pedal.
Because a high short interest is worthless if retail investors don’t play offense to squeeze short sellers.
Short sellers have lost more than $1 billion this year so far shorting AMC stock, not nearly as much as last year’s rallies.
But the entire markets were stricken down this year.
And as the market continues on a bullish path, it will naturally take AMC up with it.
AMC Entertainment has an incredible shareholder and fanbase.
The company has done right by offering NFTs, special discounts for its shareholders, and by combating Wall Street pessimists.
If there’s one thing CEO Adam Aron has proven, it’s that he understands how to raise capital, a lot of it.
Investing in AMC Entertainment means you get to help the century old movie theatre chain company stay alive.
It may also mean you’ve found yourself down the rabbit-hole and are now fighting for a fair market.
Or perhaps investing in AMC Entertainment means a once in a lifetime chance to say goodbye to that old world and embrace a new and much richer one.
Whatever the case is for you, you can’t go wrong with any of the three.
I’d love to hear your thoughts in the comment section down below.