Tag: AMC Reverse Stock Split

Adam Aron Speaks on AMC’s New Reverse Stock Split

Market News Daily - Adam Aron Speaks on AMC's New Reverse Stock Split.
Market News Daily – Adam Aron Speaks on AMC’s New Reverse Stock Split.

Adam Aron is addressing shareholders on AMC Entertainment’s (NYSE:AMC) upcoming reverse stock split, which has been temporarily denied by a judge in court.

“We could be seeing an indication that the judge wanted the timeline to more fully run its course vs. rushing the conversion process”, said Wall Street analyst Eric Wold.

An AMC reverse stock split seems to still very well be on its way due to more than 87% of shareholders approving the proposal; however, its process is momentarily on hold.

Despite majority of shareholders voting ‘yes’ for a reverse stock split and APE conversion, there are investors who have been vocal about their concerns with the proposals.

But CEO Adam Aron says investors have absolutely nothing to worry about.

Today we’re breaking down what the CEO is saying about AMC’s reverse stock split and what it could mean for shareholders.

Adam Aron on Reverse Stock Split (Update)

AMC CEO Adam Aron reads your comments and concerns on social media.

On Sunday, the CEO made the following statement:

“Some misunderstand the 1-for-10 reverse stock split, approved by 87% of March 14 votes, saying we are “stealing 90%” of your shares. You forget that the share price rises 10-fold at that time. EXACTLY the same as trading ten $1 bills for one $10 bill. Either way, you have $10.”

Investors are questioning why the reverse stock split in the first place if ‘nothing’ truly changes.

“In your comments, some fear that after a RS, short pressure could cause price to go back down. But you neglect that it is EVERY bit as easy to short a stock priced at $3.00 as it is on a stock priced at $30. A RS itself has NOTHING to do with any subsequent prices afterwards,” said the CEO on Twitter.

Here are just a few of the things that investors have pointed out in regard to the RS.

What Shareholders Should Know

➡️ While the CEO is right that the value (on paper) won’t change, market conditions today have been incredibly biased towards the downside and have been ever since AMC almost filed for bankruptcy in 2021 — we’ve seen AMC’s share price plummet from insiders selling, as well as institutions heavily shorting the stock.

➡️ On the other hand, AMC’s share price will now have to rise 10 times more from where it trades at the time of the reverse stock split in order for shareholders to break even or become profitable again.

➡️ AMC is currently trading at $5.05. Say an investor breaks even at $12, $22, $33, or $44 per share pre-RS. In a reverse stock split, AMC’s price would be at $50.50, but investors would have 10 times less shares which means the value of their portfolio would be the same. Those who would have broken even at $12, $22, $33, or $44 (ex.) would now break even at $120, $220, $330, and $440 per share with a reverse stock split.

➡️ For AMC Entertainment to trade at these numbers, big liquidity that can override heavy dark pool volume must come into the market first, much larger than the volume we saw in 2021 when shares rose to an all-time high of $72 per share.

Can AMC reach $120-$440 or more?

Absolutely, but the question is why hasn’t it prior to this reverse stock split?

The answer remains the same post a RS — hedge funds and market makers have been suppressing the stock’s true demand and shares from rising.

Liquidity in today’s market has also dropped drastically compared to the heights of the market in 2021.

Ultimately, it’s going to be big buying pressure like we saw in 2021 to trigger price action and short sellers to close.

Final Thoughts on Adam Aron’s Take on AMC’s Reverse Stock Split

An AMC reverse stock split is going to help the company tremendously!

The company will be able to raise a lot of capital very quickly and use it to pay down its debt or towards other innovative initiatives.

However, a risk AMC CEO Adam Aron is not discussing, which is very important to shareholders, is how attractive the stock may or may not be post a reverse stock split.

Many investors purchased the stock at $40, $50, $60, and $70 per share, expecting shares to continue rising.

Will shareholders buy a $50 share while having 10x less shares in efforts to drive the stock up again?

Or is it more attractive to buy shares at a lower price with bigger volume due to stocks being much more affordable?

Because if there’s one thing we learned from 2021 it’s that big buying pressure is what triggered shares to rise, ultimately squeezing a percentage of short sellers from their positions.

AMC’s reverse stock split has already been approved, but I’m curious to understand your thoughts on the CEOs comments – leave a comment down below.

Related: AMC Gets Back on The Threshold Securities List

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Where is AMC Stock Going? Latest News and Updates

AMC Stock news today
Business news: AMC Stock News today.

Where exactly is AMC stock going? Will AMC stock go up?

The movie theatre chain stock has broken below its major level of support, now trading below $5 per share.

CEO Adam Aron mentioned shareholders will be able to vote on converting APE equity into AMC common shares, plus a reverse stock split.

APE shares have risen over 140% in the past 5-trading days despite AMC stock trending downward.

The company has had great success this year with a ton of great box office hits such as Top Gun: Maverick ($718M), Black Panther: Wakanda Forever ($427.3M), Doctor Strange in The Multiverse of Madness ($411.3M), and Jurassic World: Dominion ($376M).

Still, Wall Street critics continue to bet against AMC Entertainment despite the popularity of movie theatres coming back.

Here are the latest AMC news and updates.

Why is AMC Stock Down?

Why is AMC stock down?

AMC closed at $4.40 on Friday the 23rd before the Christmas holiday.

The company is still seeing large intraday trading volume with many days going above the average of 26.9 million.

Fintel is report AMC’s short interest at 19.42% which means AMC Entertainment is currently heavily shorted.

Dark pools and off exchange trading have suppressed the stock from making any real moves towards the upside.

We can see that the demand for the stock has been high, but the agenda has kept the markets low as we see clearer warning signs of an upcoming recession in 2023.

Many investors have displayed resentment towards the CEO for not addressing manipulative short selling, a blatant practice that has been occurring since the inception of the ‘meme stock’ frenzy.

While many AMC shareholders are exuberant to demonstrate their support for the company, others are looking for the next major leg up to exit their positions.

Is A Reverse Stock Split Underway?

AMC Theatres published a press release detailing an upcoming shareholder meeting that will allow investors to vote on the conversion of APE equity to AMC common stock, and an AMC 1:10 reverse stock split.

So far, more than 72% of nearly 7,000 AMC shareholders said on Twitter they will vote ‘YES’ on the reverse stock split.

The 27% of shareholders who said they don’t support the proposal say this form of ‘dilution’ is not beneficial long term, even if it does buy the company time.

While a reverse stock split is not commonly viewed as a positive outlook for a company, it certainly has its advantages.

Even so, shareholders have spent a lot of money and a lot of time accumulating their shares.

A reverse stock split means shareholders would lose 90% of their shares while still holding the same value at a higher share price.

If you’re a shareholder, leave your thoughts in the comment section on this.

Did you vote ‘YES’ or ‘NO’ for an AMC reverse stock split?

Where is AMC Stock Going?

Where is AMC stock going?

So, where is AMC stock going?

With so much uncertainty in the market and within the business itself, a high probability outlook is more of a 50/50 chance in either direction.

But that’s an investment, right?

The company has more debt than it is generating revenue, but it also has a very strong retail base that continues to arm it with liquidity.

AMC without its shareholders may fall into the 50% loyal movie fanatics will not want to see it in.

With a strong shareholder base behind the company, however, means the company has time on its side to turn fully positive.

But I’m curious to know what you think.

Leave your thoughts below.

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