AMC Entertainment closed at $24.81 on Tuesday after trading volume surpassed its average volume of 46 million by 25.5 million.
The movie theatre chain peaked around $26 per share before retesting the $24 and $25 levels intraday.
Shareholders are anticipating even larger price action after AMC’s dividend is distributed.
Is this just the beginning for AMC Entertainment?
Is a much more aggressive share price on the way?
Let’s discuss it.
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Apes get amped for APE
APE stock is on its way.
Every AMC shareholder is going to receive an equivalent amount of ‘AMC Preferred Equity’, aka APE, for every AMC share they hold.
The initiative is part of the company’s strategy which will allow them to raise capital and pay off some debt.
The value of AMC’s share price will be split in half with APE, but shareholders are determined strong buying pressure will send both stocks to the moon.
Investors will have until Friday the 19th to lock the deal and should see the new security in their broker accounts by Monday the 22nd.
The AMC community is certain many people won’t receive the dividend due to the vast amount of naked shorting that has occurred in AMC stock.
Many have contacted their brokers to ensure they will indeed be receiving the dividend on the promised date.
Failure to deliver the dividend would mean big trouble for financial institutions and more than likely a share recall, annihilating short sellers and likely triggering a short squeeze.
While the theory is not far-fetched and actually quite logical, brokers should be able to meet the demand.
Only a few days left until time may tell.
Momentum is building
Last year AMC Entertainment stock hit an all-time high of $72 per share and shareholders are confident the share price will surpass this amount this year.
Today we’re seeing AMC climb back out of the hole it was dragged to when the markets began to drastically pull back.
AMC is showing strong bullish sentiment again which explains why its volume has been exceeding its daily average.
The movie theatre stock will have to break its yearly downtrend above the $27-$28 levels if it’s to go berserk again.
Fortunately, it’s very possible.
But momentum is key.
It was momentum that pushed AMC stock from $2 per share to $20 per share in January of 2021 and it was momentum that also pushed the stock from $14 per share to $72 per share in June of last year.
The stock is currently respecting the mid-$20 levels which shows heavy interest in the movie theatre chain.
Will retail investors be successful in taking AMC to the next level?
I certainly think so.
But it won’t be easy as institutions continue to borrow millions of shares to short the stock.
The suppression is still there which means the momentum will have to be much greater.
Is this the beginning of the end for AMC?
Retail investors rushed to buy AMC stock in January of 2021 to squeeze short sellers and make a lot of money, similar to what occurred with GameStop at the time.
AMC had a high short interest and still does to this date, making it possible to still squeeze short sellers in 2022.
So, say retail investors manage to squeeze shorts and profit from a new all-time high.
Will this be the end for AMC?
I don’t think so.
Not in the way some might think.
See, AMC Entertainment is still a growing company whose improved their fundamentals for almost two years straight.
The century old movie theatre chain has introduced NFT collectibles, shareholder incentives, and movie theatre exclusives and innovations.
Whether AMC goes through another massive price runup, a short squeeze, or MOASS, it’s always going to be that legendary ‘meme stock’ company that kicked Wall Street’s ass.
AMC won’t ever be over, because the community won’t be over.
I’d love to hear your thoughts – leave a comment at the bottom section of the blog.
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After stating the likelihood of problems distributing the dividend, you the state “While the theory is not far-fetched and actually quite logical, brokers should be able to meet the demand” without any supporting information for that statement. What evidence do you have that brokers should be able to meet the demand?
Oh I don’t know maybe because brokers have distributed GME’s dividend, and Apples, and Teslas
Certainly the acquisition of Cineplex under the umbrella of AMC will send this firm beyond U.K. firm Cineworld and demonstrate globally the strength in thier leadership.
Let’s start a discussion! Leave your thoughts below.