AMC Entertainment stock might have dropped in share price, but the volume shows investors aren’t leaving.
In fact, there’s been a lot of FUD (fear, uncertainty, and doubt) occurring where retail investors are either being advised to sell AMC’s Preferred Equity (APE) by brokers or being advised to sell AMC stock altogether by mainstream media.
While both might be quite alarming, investors seem to be holding down the fort for the movie theatre chain.
And if you’re puzzled by what may lie ahead for AMC then this article will provide you with some clarity.
Let’s get started!
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Yet CEO and Chairman Adam Aron is ridiculed for doing what no one else in history has done, communicating with shareholders to save a century old company from the grips of Wall Street market manipulators.
But the truth is Adam Aron is a sharp businessman and has an incredible skill for raising capital out of thin air.
He recently proposed AMC’s Preferred Equity, or $APE.
APE allows the company to have access to a fraction of shareholder’s capital in AMC stock by dividing the stock’s value into two separate securities.
While AMC Entertainment might not be able to dilute more AMC shares unless approved by shareholders, the company has access to do so with APE, raising a large sum of capital at any given moment.
It’s a genius move on behalf of the company and investors are happy to contribute to any possible catalyst that may potentially squeeze short sellers.
Retail investors continue to buy AMC stock
On Wednesday the movie theatre chain closed with its average of 49 million in volume.
The previous trading days consisted of trading at the average volume or twice its average volume, reaching more than 100 million.
AMC’s high volume shows that despite falling share prices, there’s high demand for the movie theatre stock.
On social media, ‘apes’ continue to raise awareness of market injustices and lack of proper institutional regulation.
SEC Chairman Gary Gensler said on Twitter, “regulators are looking to bring greater transparency into short selling”, a practice that market makers and hedge funds have overleveraged to suppress stocks such as AMC, GameStop, and many more from reflecting their true demand in the market.
Gary Gensler said in February during a Bloomberg exclusive that 90%-95% of retail’s orders are not processed through the lit exchange such as the NYSE.
But retail investors are making a ruckus, exposing conflicts of interest in the finance sector and demanding change.
For decades now the voice of reason has fallen on deaf ears, even Forbes is calling out for Gensler’s resignation.
Investors relay that only another lobbied Chairman will replace him – signifying it makes no difference.
Today, shareholders are looking to create a squeeze in both AMC and APE.
And with enough momentum, it’s impossible to not recreate what occurred in June of 2021.
Is AMC stock worth buying?
If you’re an AMC shareholder, leave a comment below explaining to new investors your thoughts.