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An excellent set-up means the big boys and girls on Wall Street are more inclined to buy and hold shares, not dump them. Once a strong chart pattern has been established, an IBD-targeting breakout offers traders the best opportunity to reap gains at the start of a potential big run. To get this ideal entry in a cup without handle, simply take the cup’s left-side high. Still, with gains of as much as 501% in just two weeks, it made sense to lock in at least partial profits. Check the daily price-weighted performance of all IBD industry groups, plus rankings based on six-month performance, at IBD Data Tables. AMC’s movies industry group shows an improved ranking lately, at No. 33 among IBD’s 197 industry groups in terms of six-month price-weighted performance.

You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. Meanwhile, mutual funds owning a piece of AMC stock have dropped from 686 at the end of 2021 to as low as 259 as of the end of the fourth quarter, according to MarketSmith. AMC’s ratings in IBD Stock Checkup are still showing extremely bearish tints. Keep in mind that blockbuster movies or TV shows don’t necessarily lead to an equally sizable windfall for the theater operators. This story examines fundamental, technical and fund ownership factors to determine if the Leawood, Kan., company with 900 theaters and 10,000 screens scores a good probability of making money for stock traders. AMC has seen its market value plummet to $894 million, according to MarketSmith.

  1. But the company would prefer to risk the wrath of Wall Street than stop its plans to sell shares to raise some much-needed cash to fix its liquidity problems.
  2. The beleaguered cinema chain AMC Entertainment has announced plans to sell more of its common shares.
  3. Instead, it increases the per-share price while reducing the total number of outstanding shares.
  4. On Aug. 24, trading in AMC stock reflected the 1-for-10 reverse stock split.

The U.S. movie business remains below pre-pandemic levels, and the ongoing strikes in Hollywood have clouded the release slate for the rest of 2023 and 2024. AMC and pop star Taylor Swift announced last week that the theater chain is serving as the distributor for a concert movie of The Eras Tour to be released in October. “The continued decline in AMC shares … is likely due to investors focusing on the strong possibility that euraud correlation AMC begins issuing large amounts of equity to address the debt balance,” Eric Wold, an analyst at B. AMC also is planning a 10-to-1 reverse stock split of its common stock on Thursday. That’s after a judge recently approved a complicated stock maneuver the company is planning. Things are looking up for AMC after a strong quarter ahead of the summer blockbuster, which should be reflected in its Q3 results later this year.

The plan was initially shared back in March, quickly drawing the ire of AMC shareholders and sparking litigation. Earlier this month AMC’s revised stock-conversion plan was approved by the Delaware Chancery Court. AMC’s plan to convert its APEs to common stock was blocked last month when Delaware Chancery Court Judge Morgan Zurn rejected a settlement that would have allowed the deal to proceed. The stock-conversion plan is part of the movie-theater chain and meme-stock darling’s ongoing battle to eliminate debt.

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On a brighter note, AMC announced this morning that it would expand its presence in the “Premium Gourmet Candies” sector by offering its own line of branded chocolate candies. These include chocolate covered pretzels, almonds, raisins and peanuts. The company’s new sweets will be available in AMC theaters starting this week. Meanwhile, AMC stock has declined by more than 8% during the past month. This is likely the result of the dilutive effects of issuing new shares. With more cuts in the pie, each shareholder’s stake, or piece of the pie, gets smaller.

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Strong future profits could lead to increasing accumulation by large funds and other institutional investors. A powerful rebound could force short sellers to cover their positions, helping to propel shares even higher. According to MarketSmith, short interest — shares sold short by individual and professional investors — has rebounded to 24.8 million shares, or nearly 13% of the stock’s newly revised float of 196.4 million shares. Let’s first revisit the hyper-fast run during the meme stock boom of 2021.

Analyst’s Opinion

In August last year, AMC held a very respectable 96 Relative Strength Rating. This score means AMC stock had outperformed 96% of all stocks in the IBD database over the past 12 months. And the 3-month RS Rating at the time zoomed to a highest possible 99, according to MarketSmith data.

The conversion resulted in the trading of a single class of AMC shares and the completed 1-for-10 reverse split of common shares. “Once AMC completes these actions, it will have the authorization to issue up to 550 million additional shares without further shareholder approval,” said Reese. “AMC may use the opportunity to repay some or all of its debt balance while AMC shares are still trading at a premium.” A reverse stock split, like the one executed by AMC, doesn’t inherently alter the fundamental value of the company itself. Instead, it increases the per-share price while reducing the total number of outstanding shares.

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Wall Street currently sees AMC posting a net loss of $1.55 a share this year (down from $3.02) and a net loss of $1.65 in 2024, down mildly from an earlier estimate of -$1.82. In 2022, AMC posted a full-year adjusted net loss of $6.95 a share vs. a net loss of $11 in 2021, according to MarketSmith data. The company reported net income of $12.3 million in the third quarter, a vast improvement from a net loss of $227 million a year earlier. AMC also said it achieved diluted earnings of 8 cents a share vs. a net loss of $2.20. Adjusted EBITDA jumped to $193.7 million from a negative $12.9 million a year ago. AMC Entertainment posted a third-quarter net loss of 9 cents per share amid a healthy 45% rise in sales to $1.41 billion.

AMC Entertainment Holdings, Inc owns, operates, or has an interest in cinema theatres in the United States and Europe but has also expanded into digital and streaming media. In 2000, the company partnered to offer the first online ticket sales and expands it to all theaters, even Empire 25 in New York, the world’s busiest movie theater. In regard to market dominance, AMC Entertainment operates 22 of the US 50 busiest movie theaters and 4 of the top 5. Later, the company announced the launch of streaming services in 2019 and listed thousands of titles across a wide spectrum of genres and categories by mid-2022. Now, AMC’s plan to convert its preferred shares into more common stock has a lot of investors nervous that the move will basically dilute the stock’s value. AMC shares closed at a record low on Wednesday, plunging 37% to hit a price of $8.62.

“So, generally, firms don’t really like to have a lot of preferred stocks floating around,” he said. A more straightforward question to answer might be, what isn’t happening? Before this week’s announcement, a flurry of activity in AMC stock in recent weeks has left investors uneasy.

However, AMC used up its allotment of stock and needed shareholder approval to issue more. The company issued the preferred APE shares as part of a strategy to change its corporate voting structure and get shareholder approval to sell additional common stock. AMC was widely expected to sell additional shares after the successful conversion of the preferred APE shares into AMC common stock in August. AMC Entertainment Holdings, Inc., is the world’s largest movie theater chain with over 11,000 screens. The company was founded in 1920 by the Dubinsky Family and is headquartered in Leawood, Kansas.

Current projections from Wold show AMC is unlikely to move into positive free cash flow territory until 2025, so having additional liquidity is necessary for the company’s immediate future. Shares of AMC Entertainment Holdings Inc. continued their slide Tuesday, hitting a record intraday low and another record-low close. Upgrade to MarketBeat All Access to add more stocks to your watchlist. Click the link below and we’ll send you MarketBeat’s list of the 10 best stocks to own in 2024 and why they should be in your portfolio. Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.

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