Big changes are happening next week for AMC Entertainment.
Shareholders are going to be receiving AMC’s Preferred Equity, or APE as a dividend starting on Monday.
The stock closed at $18.02 on Friday after being up more than 7 times pandemic levels just a little over a week ago.
AMC’s share price has since cooled off from its rally up to $26 but retail investors are convinced market makers are pushing the stock down.
Regardless, shareholders are optimistically anticipating some bullish momentum.
Here is what we can expect from AMC Entertainment stock next week.
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AMC to distribute APE stock
On Monday, August 22nd, AMC shareholders will be receiving an exact amount of APE stock equivalent to the amount of AMC shares they hold.
APE will trade for half the price of AMC’s share price at the close of AMC on Friday, which means shareholders can expect AMC and APE to trade approximately around $9 per share each, respectively.
Market conditions will determine the price of both securities moving forward based on supply and demand of course.
But this means both assets will be on a heavy discount.
While APE stock provides AMC Entertainment with capital, some investors see the security as a collectible – part of the movement against Wall Street corruption.
There’s no doubt shareholders will be purchasing both AMC and APE stock next week but if institutional buyers get involved, it could mean heavy price action.
While institutions might not be into APE as much as ‘apes’ are, APE could prove to be an incentive for institutional buyers to buy AMC at a bargain.
APE is already going to improve AMC’s fundamentals drastically since it’s ultimately a pool of capital for the company to access at any moment.
AMC Entertainment stock might attract investors who see this power move as a genius strategy.
Is momentum guaranteed next week?
Momentum and buying pressure are never guaranteed in the market.
Investor sentiment will dictate how much buying pressure feeds both AMC and APE stock next week.
It’s all about interest, and majority of AMC shareholders seem to be interested in adding to their positions.
Shareholders have been buying AMC stock prior to the distribution of the dividend to receive more APE shares.
More than 513 million APE will be distributed, essentially initiating a share count.
Retail investors betting on an AMC short squeeze are determined APE could be the catalyst that will expose synthetic shares in the market and trigger AMC to squeeze past its previous all-time high.
And while AMC does have the potential to squeeze based on its high short interest data, only time will tell if APE truly is the catalyst for what could be one of the most incredible plays in the history of the stock market.
AMC technical analysis
AMC Entertainment stock is hovering just above a massive level of support around the $17-$18 range again.
This means that AMC has the potential to bounce from this level of support and retest rejection levels around $27 per share.
Breaking $27.50 could set AMC on a course to the unknown where it may surpass last year’s all-time high of $72 based on how high the demand for the stock is.
As of now, what we can expect next week for AMC Entertainment is a coin toss.
AMC’s share price will be lower with the issuance of APE stock which means shareholders will have to lift AMC back to these trend lines.
Momentum has always been AMC’s catalyst though, and I’m confident that with enough buying pressure, retail investors will see a bounce back in the coming days.
But I’d love to hear your thoughts in the comment section down below.
What do you anticipate for AMC next week?
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