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Citi, Goldman, Extend AMC’s Covenant Waiver to 2024: What it Means

AMC Covenant Waiver
Market News Today: Banks extend AMC’s covenant waiver to 2024.

CEO Adam Aron said Citi, Goldman Sachs, and Credit Suisse have extended AMC’s covenant waiver to March 31st of 2024.

“This is a reflection of AMC’s recovery being well under way… a vote of confidence in AMC by our banks that we much welcome. Thank you Citi, Goldman, and Credit Suisse”, said AMC Entertainment (NYSE:AMC) CEO Adam Aron on Wednesday.

So, what exactly is a covenant waiver extension and what does this mean for AMC Entertainment?

What is a Covenant Waiver?

A covenant waiver is when a lender temporarily forgives a borrower’s breach of a loan covenant.

In AMC’s case, the lenders are Citi, Goldman Sachs, and Credit Suisse.

Debt covenants are restrictions that lenders (creditors, debt holders, investors) put on lending agreements to limit the actions of the borrower (debtor), AMC Entertainment.

In other words, debt covenants are agreements between a company (AMC) and its lenders (Citi, Goldman, Credit Suisse) that the company will operate within certain rules set by the lenders.

Should a borrower violate a covenant, such as not maintaining a certain interest coverage ratio or engaging in unpermitted business activities, it may constitute a loan default, per The Balance.

Financial Covenants Explained

Covenant requirements are conditions the borrower must regularly meet throughout the term to demonstrate their creditworthiness to the lender.

Lenders frequently use certain financial tests that serve as indicators of the borrower’s repayment ability.

Failure to meet these tests violates the covenant and constitutes loan default.

In AMC Entertainment’s case, lenders have waived, or forgiven AMC’s breach of contract, per their loan covenant and extended it to March 31st 2024.

What Does This Mean for AMC Entertainment?

AMC News Today.
AMC News today.

For AMC Entertainment, a covenant waiver will allow the business to run operations under its debt contracts with Citi, Goldman Sachs, and Credit Suisse until 2024.

If the company fails to meet its debt obligations, or financial covenant requirements, then the loans are subject to default.

This puts AMC Entertainment in a tricky position in terms of what they can and cannot do or say.

Which also explains why the CEO cannot raise awareness of the manipulative shorting of the company stock.

It’s very likely that speaking out on such topics may violate these covenant agreements.

Some retail investors have scrutinized Adam Aron for not speaking out on naked shorts like other CEO’s are doing today.

But this news may provide shareholders with more perspective on why that is.

Is AMC Entertainment Being Held Hostage by Lenders?

Citigroup currently holds call options representing 0 of underlying shares valued at $0 USD and put options representing 55,000 of underlying shares valued at $383,000 USD.

Source: Fintel.

The bank has been selling shares while playing put options in order to profit from the drops they’re triggering in the market.

As of November 7th, 2022, Citigroup has dropped AMC’s price target from $3.13 per share to $1.20 per share and used the media to promote the price target.

Just a month prior to Citi’s price hit, Credit Suisse said in October AMC shares are worth less than $1.

The banks are making their money which means it’s going to be up to the company and shareholders to prove the Wall Street short thesis wrong.

But I’m interested in hearing your thoughts.

Leave a comment down below.

Market News Published Daily

Market News Today - FrankNez News, Business News + more.
Market News Today – FrankNez News, Business News + more.

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Franknez.com is the media blog that keeps retail investors informed.

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AMC Stock is Up +40% This Year: What it Means for Shorts

Daily Market News: AMC stock news, updates + more.
Daily Market News: AMC stock news, updates + more.

AMC Entertainment (NYSE:AMC) stock is up more than +40% this year-to-date.

New developments this year may send share prices rising throughout 2023.

Streaming giants have figured out that the theatrical experience is key to their long-term success.

AMC Entertainment CEO Adam Aron praised Disney for scheduling Stephen King’s ‘The Boogeyman’ to be released theatrically on June 2nd, 2023.

The film was originally planned to be released on the streaming service Hulu.

“Theatres beat streamers! We salute producer 21Laps and our friends at Disney for this decision. The Boogeyman, a Stephen King adaption, was made for Hulu. But it tested so well, Disney is releasing it theatrically instead. Thank you Bob Iger, Alan Bergman, Justin, Tony, and Ken,” said Adam Aron on Twitter.

On the other end, CNBC says Netflix left $200 million on the table for not leaving Daniel Craig’s ‘Glass Onion: A Knives Out Mystery’ in theatres longer.

So, what does this say about the Wall Street short thesis that movie theatres are dead?

Here’s the latest AMC Entertainment stock market news.

Online Streaming Might Not Be What Wall Street Hoped For

AMC online streaming news - Netflix falls short.
AMC online streaming news – Netflix falls short.

In October, AMC announced its first ever Netflix showing in 200 theatres.

Glass Onion: A Knives Out Mystery starring Daniel Craig was released in the U.S. as well as the UK, Ireland, Italy, Germany, and Spain.

CEO Adam Aron stated on Twitter that success here could lead to more Netflix (NASDAQ:NFLX) movies at AMC.

The film earned $15 million at the box office but CNBC says the showing could have made $200 million if it had been kept in theatres longer.

The sequel to Johnson’s popular “Knives Out” opened in nearly 700 theaters, the largest release of any Netflix original film to date, 200 of which were AMC Entertainment theatres.

Unfortunately for the online streaming platform, hundreds of millions of dollars were left on the table.

Box office analysts say Glass Onion could have earned much higher earnings if Netflix had opted for a traditional wide release of 2,000 to 4,000 theaters.

What Are Experts Saying?

CNBC stated, “Netflix has backtracked on its previous policies, including by introducing an ad-supported subscription option, leading many to wonder whether the company should rethink its resistance to the traditional Hollywood movie release model as it looks for new ways to grow revenue.

Related: AMC’s Cost to Borrow Has Hedge Funds Burning $20 Million Per Month

What Does This Mean for Short Sellers?

Daily Market News by FrankNez - Will AMC go up again?
Daily Market News by FrankNez – Will AMC go up again?

For short sellers betting against the movie theatre company, it could mean severe losses if share prices were to skyrocket again.

AMC Entertainment stock is still heavily shorted, currently weighing in at 21.92% short interest (updated daily).

All it takes is for a few short sellers to begin closing their positions for other short sellers to follow suit.

This chain reaction could trigger an AMC short squeeze in 2023.

Amazon insiders told Bloomberg the retail giant plans to invest billions in the movie theatre industry, aiming to release 12-15 movies annually for theatrical release.

That number of releases puts Amazon on par with major studios such as Paramount Pictures.

CNBC stated that ‘while a $1 billion annual investment for film development is on the lower end of what major Hollywood studios spend each year, it’s a positive sign for the movie theater business.”

Related: Will AMC Stock Keep Rising this Week? (Updates)

Market News Published Daily

FrankNez News Today - Stock Market News, Business News + more.
FrankNez News Today – Stock Market News, Business News + more.

For more stock market, business news and updates, join the newsletter to receive weekly market news and notifications straight to your inbox.

Franknez.com is the media blog that keeps retail investors informed.

You can also follow me on TwitterInstagramFacebook, or LinkedIn for daily posts.


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Will AMC Stock Squeeze in 2023?

Will AMC Squeeze in 2023?
Stock Market News: Will AMC squeeze in 2023?

Will AMC squeeze again? In 2021, the movie theatre chain stock skyrocketed from $2.50 early that year to $72 per share in the summer.

Many retail investors held the stock even as the CEO cashed in more than $40 million.

The stock dropped more than -84% in 2022 leaving majority of holders with significant unrealized losses, and very few still in profit.

AMC Shareholders have continued to raise awareness of market injustices surrounding dark pools, naked shorting, and off exchange trading.

Since the events of the ‘meme stock’ frenzy in 2021, ‘We The Investors‘ has reached a historic milestone, representing the retail community in direct engagement with SEC Chairman, Gary Gensler.

Today, Ortex is reporting AMC’s short interest at a high of 22.10%.

This is nearly the short interest AMC had before the stock shot up from $14 to $72 per share.

The high short interest is a strong indicator AMC has the potential to squeeze again.

The question is, will AMC stock squeeze in 2023?

First, let’s dive into what triggered the event in 2021 to better understand whether today’s market conditions are in retail’s favor.

Related: How to Buy AMC Stock (2023 Guide)

What Caused AMC to Spike?

AMC Short Squeeze chart - Franknez.com.
AMC Short Squeeze chart – Franknez.com.

So, what caused AMC stock to go up?

In short, it was a high short interest percent and massive buying pressure.

#1. High Short Interest Percent

The short interest in a stock is the percentage of the float that is essentially being shorted.

When you have a lot of short sellers betting on the downside of a company’s stock, there’s a probability to squeeze them out of their positions if the price shoots up quickly.

Short sellers may see significant (unrealized) losses momentarily and choose to either close their positions for a loss or keep accumulating short positions if they think shares will come back down.

What happened with AMC is that when the stock first shot up from $2.50 to $20 per share, short sellers began to take big positions.

Therefore, we saw the short interest increase.

But once AMC’s share price began to rise to $9 per share, then $14 per share, and eventually break that resistance, short sellers began to close their positions to refrain from accruing larger losses.

This is when we slowly began to see AMC’s short interest decrease from 22% to 14%.

As AMC began to come down from its all-time high in June, AMC’s short interest began to rise again, signifying short sellers were getting back in.

Today, AMC’s short interest is at 22.10% according to both Fintel and Ortex.

This is big.

#2. Massive Buying Pressure

Massive buying pressure is what triggered AMC shares to rise.

See, this wasn’t just a one-time spike, but rather days of nonstop bullish momentum.

AMC Entertainment stock was experiencing extremely high intraday volume of 700 million and 900 million prior to hitting its all-time high.

Previous months still consisted of several hundreds of millions in trading volume.

Discords were flooded with anxious and excited investors as they saw shares rise over and over again.

The battle of $8.01 was known as a victorious day for retail investors who were buying the dip every time the market would bring the price down.

Days such as the battle of $8.01 influenced what was to come next.

Absolute Armageddon for hedge funds betting against AMC Entertainment and an emerging retail community Wall Street never saw coming.

Read Exclusive FrankNez Content for Only $1/mo.

Market Conditions for A Short Squeeze

The market conditions were completely different when AMC surged to $72 per share than what they are now.

In 2022, we entered a bear market that brought the entire market to its knees.

Experts are saying we may experience continued volatility in the market as signs of an upcoming recession rise in 2023.

Also read: Where Is the Stock Market Headed in 2023?

However, stocks such as AMTD Digital, Inc. proved that market conditions don’t have to be set in a bull market to squeeze.

HKD stock surged more than +20,000% in August of 2022.

Shares rose from $13.54 to $2,200 in weeks from sheer buying pressure, fresh from its IPO.

The truth is a short squeeze may be triggered both during a bull market and bear market.

One key element we’re discovering that triggers a short squeeze is heavy buying volume.

Heavy buying volume is what allowed GameStop to squeeze to $483, HKD to $2,200, and AMC to $72 per share.

*Poll of The Week

Will AMC Squeeze in 2023?

will AMC squeeze in 2023.
Will AMC squeeze in 2023? AMC stock news and updates.

AMC Entertainment has both the high short interest and retail community behind it to trigger another short squeeze in 2023.

However, recession conditions might cap the ability for retail investors to buy in heavy again this year.

Layoffs, rising interest rates and inflation could slow down how much liquidity is being pumped into the stock market.

This makes triggering an AMC short squeeze in 2023 more challenging than if the U.S was currently a thriving economy.

Also read: How to Get Your Money Right in 2023

Shareholders should not be discouraged; anything can happen this year.

For more AMC stock news and updates, join the newsletter to receive weekly market news and notifications straight to your inbox.

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Avatar Exceeds AMC Entertainment CEO’s Box Office Prediction

Adam Aron AMC Entertainment CEO
Business News: Avatar: The Way of Water Exceeds AMC Entertainment CEO’s Expectations.

AMC Entertainment (NYSE:AMC) CEO Adam Aron said his predictions were easily surpassed as Avatar: The Way of Water exceeded $570.3 million domestically.

Adam Aron said on Twitter last week, “Next week, it has a good short of hitting $550 million domestic, $1.8 BILLION worldwide. Those who say movie theatres are an anachronism or dead are wrong, wrong, wrong.”

The CEO says the blockbuster movie could exceed $600 in domestic ticket sales and $1.8 billion globally.

The Avatar sequel’s fifth-week performance means it is now the 13th highest-grossing movie of all time at the U.S. box office, overtaking 2008’s The Dark Knight and 2019’s Lion King remake, according to Box Office Mojo.

While it remains at the same spot as last week in the worldwide all-time rankings, the movie is expected to overtake Spider-Man: No Way Home sometime this week and begin closing in on Avengers: Infinity War and Star Wars: Episode VII – The Force Awakens.

Cameron has previously stated that Avatar: The Way Of Water needs to earn around $2 billion just to break even. The sequel’s steep budget however includes the cost of filming Avatar 3 and developing the scripts for a fourth and fifth film.

Source(s): FrankNez, Forbes.

U.S. Box Office Rankings – Friday to Monday (est.)

  1. Avatar: The Way Of Water (Week 5) — $38.5 million
  2. MEG3N (Week 2) — $21.2 million
  3. Puss in Boots: The Last Wish (Week 4) — $17.3 million
  4. A Man Called Otto (Week 3) — $15 million
  5. Plane (Week 1) — $11.6 million
  6. House Party (Week 1) — $4.4 million
  7. Black Panther: Wakanda Forever (Week 10) — $2.6 million
  8. The Whale (Week 6) — $1.8 million
  9. Whitney Houston: I wanna Dance With Somebody (Week 4) — $1.3 million
  10. Waltair Veerayya (Week 1) — $1.2 million

Movie titles continue to bring in millions of dollars despite Wall Street doomsayers short on the industry.

At some point, the narrative has to change.

Sources say Amazon is planning to invest $1 billion per year in the movie theatre industry.

The world’s largest online retailer aims to make between 12 and 15 movies annually that will get a theatrical release.

Amazon is still sorting out this strategy said people who asked not to be identified.

That number of releases puts Amazon on par with major studios such as Paramount Pictures, says Bloomberg.

Streaming Services Aren’t Enough

As “Avatar: The Way of Water” gets closer to the $2 billion mark at the worldwide box office, James Cameron says it’s a reminder that moviegoers still value the theatrical experience in an era of streaming dominance.

“I’m thinking of it in the terms of we’re going back to theaters around the world. They’re even going back to theaters in China where they’re having this big COVID surge. We’re saying as a society, ‘We need this! We need to go to theaters.’ Enough with the streaming already! I’m tired of sitting on my ass. Source: Variety.

The sequel to Johnson’s popular “Knives Out” opened in nearly 700 theaters, the largest release of any Netflix original film to date, 200 of which were AMC Entertainment theatres.

Glass Onion: A Knives Out Mystery starring Daniel Craig was released in the U.S. as well as the UK, Ireland, Italy, Germany, and Spain.

The film earned $15 million at the box office but CNBC says the showing could have made $200 million if it had been kept in theatres longer.

Unfortunately for the online streaming platform, hundreds of millions of dollars were left on the table.

Box office analysts say Glass Onion could have earned much higher earnings if Netflix had opted for a traditional wide release of 2,000 to 4,000 theaters.

CNBC stated, “Netflix has backtracked on its previous policies, including by introducing an ad-supported subscription option, leading many to wonder whether the company should rethink its resistance to the traditional Hollywood movie release model as it looks for new ways to grow revenue.

The Rise of The Movie Theatre Industry Is Here

Avatar has AMC Entertainment’s CEO Adam Aron laughing at short sellers who are betting against the company and movie industry as a whole.

Shareholders have been stating for years now that the theatrical movie experience is irreplaceable.

The public continues to prove that while online streaming platforms such as Netflix and Disney+ are convenient, nothing beats the cinema experience.

But I’m curious to hear your thoughts on where you think the movie theatre industry is headed.

Leave a comment down below.

For more AMC stock news and updates, join the newsletter to receive weekly market news and notifications straight to your inbox.

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Where is AMC Entertainment Stock Headed Next Week?

will AMC stock go up next week?
Market News and Updates: Will AMC stock go up next week?

AMC Entertainment stock closed the trading week up more than +30%.

The company stock seems to have bottomed out around $4-$5 key levels.

Fintel is currently reporting AMC’s short interest at 22.02%, which means short sellers continue to short the movie theatre chain.

More than half of AMC’s orders are being moved to dark pools, suppressing true retail demand.

However, the movie theatre stock is currently up +28.75% this year-to-date.

Higher trading volume days has caused shares to rise despite off exchange trading.

Where is AMC Entertainment stock headed next week?

Here are some high probabilities and scenarios.

AMC Stock Bounces from Key Support Levels

did AMC bottom out?

AMC Entertainment stock declined more than -70% last year, as most of the market did.

The stock showed major support around the $6 level before getting crushed below $4 towards the end 2022.

Share prices have retested $4 and $5 indicating a clear bounce and bottom for the movie theatre stock.

Volume has risen despite ongoing shorting in the company.

AMC is currently up more than +28.75% in only the first two weeks of the new year.

New investors who purchased the stock in January are currently up this year, but long-term shareholders continue to hold unrealized losses with few breaking even and even fewer still in profit at current levels.

AMC Entertainment, along with GameStop, Mullen Automotive, Meta Materials, and many others, have been targets for big short sellers.

This part of the equation alone makes these companies short squeeze plays.

Will AMC stock go up next week?

Here are a few predictions based on current technical analysis.

Also Read: Why is MULN Stock Going Down?

Will AMC Stock Go Up Next Week?

AMC Entertainment stock will need to break above the $5.13 level to continue its current uptrend.

A break above $5.13 has the potential to take AMC’s share price up to $5.34, then to $5.55.

We are seeing resistance at this level after hours.

Will AMC Stock go up next week? AMC technical analysis Webull.
Will AMC Stock go up next week? AMC technical analysis Webull.
Where is AMC headed next week?

A selloff or weak buying pressure at the start of Tuesday’s trading day may take AMC’s share price down to retest $5 and possibly even $4.90.

The stock may go as low as $4.77 if buyers don’t step in.

Does Volume Matter?

Momentum will be the catalyst for AMC, despite the large volume of off exchange trading.

Example:

Since approximately 50% of retail’s trades are happening outside of the lit exchange, it means that out of 100 trades, 50 of them are lit.

An increase of 1,000 trades means now 500 trades are lit.

100,000 trades means 50,000 trades are now lit, compared to a low volume buying day of just 100 trades with 50 being lit.

And so on.

Buying pressure matters.

This is why retail investors have always been the biggest catalyst for a short squeeze.

Will the Short Thesis Eventually Change?

The rise of the movie theatre industry is here.

Recent developments have the potential to change the short thesis and enable short sellers to go long instead; closing their short positions.

Changing fundamentals, alliances, and opinions about the movie theatre industry by big players will have a big impact on where AMC’s share price goes in the near- and long-term future.

We want to see AMC’s market cap grow, debt come down, revenue increase, and more money going into the development of new movie titles.

Partnerships and collaborations will demonstrate how the movie theatre industry is a necessary part of the entertainment industry and key to bigger profits in the future, yes, even for online streaming giants.

Would you agree or disagree?

Leave your thoughts in the comment section of the blog down below.

For more Netflix news and updates, join the newsletter to receive weekly market news and notifications straight to your inbox.

Or follow me on TwitterInstagram, or LinkedIn.


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