AMC traded below $7 this week and shareholders are wondering whether AMC will rebound in October.
September tends to be one of the most bearish months of the year while October tends to be the complete opposite.
Even in the crypto space investors prepare for big price action.
AMC recently filed a form 8-K filing confirming it is selling up to 425 million APE shares to reduce their debt.
This fundamental strategy could also play a big role in how the stock moves this month as it steers towards the right direction.
Let’s discuss it below.
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Bullish October for AMC Entertainment Stock?
Is October a good month for stocks?
Historically, October has been a really positive month for stocks, although it has had its volatile moments.
Unusual Whales tweeted that October tends to be a “bear-market killer”, known for its historically strong returns, especially during midterm elections, per MarketWatch.
AMC Entertainment stock has tumbled all year alongside the market.
As the market reverses, we can expect AMC to follow.
Does this mean October will spark the beginning of a bull market?
Not quite, as it will take some time to see this develop.
The country is in a recession and just about every market has substantially more sellers than buyers.
October could yield a momentary bull run, but a bull market will take time to determine based on economic and buying conditions.
Where does this leave APE?
AMC is selling up to 425 million shares of APE to pay down their debt, which means APE prices will tumble as a result of the selloff.
The company issued the following statement:
“Under the circumstances, we caution you against investing in our AMC Preferred Equity Units, unless you are prepared to incur the risk of losing all or a substantial portion of your investment,” said the official statement from AMC Entertainment.
APE gave AMC Entertainment access to a portion of shareholders’ capital without needing the approval to dilute AMC shares.
This cash cow is now available for AMC to claim in order to pay down its debt.
Is APE worth investing in?
I personally think it’s more of an investment tool for the company rather than for shareholders aiming to squeeze shorts from their positions.
But I’m curious to know your thoughts.
Leave a comment down below.