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?
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?
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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