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.
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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.