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2021-08-03
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AMC Stock May Fall Hard if Momentum Fades
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AMC stock enjoyed a “meme stock” following as short float at 16.8% remained high.</p>\n<p>Does AMC have enough positive catalysts to stock the stock from falling back to the $10 range?</p>\n<p><b>Movie Attendance a Catalyst for AMC Stock</b></p>\n<p>AMC posted a press release on July 12 that it set another post-reopening weekend attendance. Between July 8 and June 11, 3.2 million peoplewatched movies at AMC’s theatres globally.<i>Black Widow</i> opened to around $80 million in North America. This amounts to the first $100 million-plus domestic box office weekend since before the pandemic.</p>\n<p>Shareholders will not know the volume of concession sales associated with the increased attendance. They will have to wait until AMC’s next quarterly earnings report. Investors may assume popcorn ($8.00) and a medium soft drink ($5.00) for at least half of the 3.2 million in attendance that weekend. The $20.8 million in additional revenue per weekend for 13 weeks would total $270 million in quarterly revenue. Since the opening weekend is not a good indicator for total sales, the above-mentioned scenario is unlikely.</p>\n<p>When AMC shares traded at around $37 last week at a $19.11 billion market capitalization, bulls will have trouble justifying the over 40 times price-to-sales valuation.</p>\n<p><b>Competition From Streaming</b></p>\n<p>AMC’s 3.2 million weekend attendance is a modest start for now. The theatre chain has to contend with its audience preferring to watch blockbusters through streaming services. For example, when Disney+ released <i>Black Widow</i>simultaneously, it competed for box office revenue. In August,<b>AT&T’s</b>(NYSE:<b><u>T</u></b>)<i>The Suicide Squad</i> will debut simultaneously on HBO Max.Hot titles like <i>Top Gun: Maverick, No Time to Die, Due, and Eternals</i> will not arrive until October at the earliest.</p>\n<p>Movie studios will need to decide if they will continue with releasing blockbusters online and in theatres simultaneously. In doing so, AMC loses out on attracting a bigger audience. Studios have more to lose. Profits are higher from theatre ticket sales plus fans buying a copy of the movie for home viewing later.</p>\n<p><b>No More Share Dilution</b></p>\n<p>On July 6, Chief Executive Officer Adam Aron tweeted that AMC canceled plans to sell another 25 million shares. CEO Aron said, “I think shareholders should authorize 25 million more AMC shares. But what YOU think is important to us. Many yes, many no. AMC does not want to proceed with such a split. So, we’re canceling the July vote on more shares. And no more such requests in 2021.”</p>\n<p>Since insiders already dumped shares in the last few months (per Tipranks), selling more shares will not matter. Ironically, AMC Entertainment is better off selling more shares to raise as much cash as it can. It could have used the funds to retire $5.4 billion in debt. Furthermore, it is cash flow negative each quarter. It could have used the extra cash to pay for leases.</p>\n<p>AMC may issue a convertible offering within the next 12 months. It will not need to seek investor authorization. Unsuspecting shareholders may believe the offering is not an issuance of shares. This would prevent a massive sell-off, at least temporarily. Momentum investors did not fret because the stock price would not fall suddenly. Short-sellers will not mind waiting longer for AMC shares to fall slowly.</p>\n<p><b>Price Target and Your Takeaway</b></p>\n<p>Only one analyst rates AMC stock as a “buy.” The highest price target is $16 and the average is $5.84,according to Tipranks. Still, AMC’s stock price movement is unpredictable on a daily basis. The stock direction shifts as market opinion changes intraday. The volatility may attract day traders but investors seeking an undervalued business with profit growth upside for the future. Investors should leave the trading to speculators, particularly those who play on momentum.</p>\n<p>Even in the best-case scenario, fundamentals are not getting better enough to justify buying the stock at this time. Speculators are taking high risks, too. As with nearly all meme stocks in the last year, momentum fades. When trading volume dries up, the stock often falls permanently.</p>","source":"lsy1606302653667","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>AMC Stock May Fall Hard if Momentum Fades</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nAMC Stock May Fall Hard if Momentum Fades\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-08-03 13:04 GMT+8 <a href=https://investorplace.com/2021/08/amc-stock-may-fall-hard-if-momentum-fades/><strong>InvestorPlace</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Now that daily trading volume is drying up, markets will look atAMC Entertainment’s(NYSE:AMC) fundamentals more closely. AMC stock enjoyed a “meme stock” following as short float at 16.8% remained ...</p>\n\n<a href=\"https://investorplace.com/2021/08/amc-stock-may-fall-hard-if-momentum-fades/\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"AMC":"AMC院线"},"source_url":"https://investorplace.com/2021/08/amc-stock-may-fall-hard-if-momentum-fades/","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1148437644","content_text":"Now that daily trading volume is drying up, markets will look atAMC Entertainment’s(NYSE:AMC) fundamentals more closely. AMC stock enjoyed a “meme stock” following as short float at 16.8% remained high.\nDoes AMC have enough positive catalysts to stock the stock from falling back to the $10 range?\nMovie Attendance a Catalyst for AMC Stock\nAMC posted a press release on July 12 that it set another post-reopening weekend attendance. Between July 8 and June 11, 3.2 million peoplewatched movies at AMC’s theatres globally.Black Widow opened to around $80 million in North America. This amounts to the first $100 million-plus domestic box office weekend since before the pandemic.\nShareholders will not know the volume of concession sales associated with the increased attendance. They will have to wait until AMC’s next quarterly earnings report. Investors may assume popcorn ($8.00) and a medium soft drink ($5.00) for at least half of the 3.2 million in attendance that weekend. The $20.8 million in additional revenue per weekend for 13 weeks would total $270 million in quarterly revenue. Since the opening weekend is not a good indicator for total sales, the above-mentioned scenario is unlikely.\nWhen AMC shares traded at around $37 last week at a $19.11 billion market capitalization, bulls will have trouble justifying the over 40 times price-to-sales valuation.\nCompetition From Streaming\nAMC’s 3.2 million weekend attendance is a modest start for now. The theatre chain has to contend with its audience preferring to watch blockbusters through streaming services. For example, when Disney+ released Black Widowsimultaneously, it competed for box office revenue. In August,AT&T’s(NYSE:T)The Suicide Squad will debut simultaneously on HBO Max.Hot titles like Top Gun: Maverick, No Time to Die, Due, and Eternals will not arrive until October at the earliest.\nMovie studios will need to decide if they will continue with releasing blockbusters online and in theatres simultaneously. In doing so, AMC loses out on attracting a bigger audience. Studios have more to lose. Profits are higher from theatre ticket sales plus fans buying a copy of the movie for home viewing later.\nNo More Share Dilution\nOn July 6, Chief Executive Officer Adam Aron tweeted that AMC canceled plans to sell another 25 million shares. CEO Aron said, “I think shareholders should authorize 25 million more AMC shares. But what YOU think is important to us. Many yes, many no. AMC does not want to proceed with such a split. So, we’re canceling the July vote on more shares. And no more such requests in 2021.”\nSince insiders already dumped shares in the last few months (per Tipranks), selling more shares will not matter. Ironically, AMC Entertainment is better off selling more shares to raise as much cash as it can. It could have used the funds to retire $5.4 billion in debt. Furthermore, it is cash flow negative each quarter. It could have used the extra cash to pay for leases.\nAMC may issue a convertible offering within the next 12 months. It will not need to seek investor authorization. Unsuspecting shareholders may believe the offering is not an issuance of shares. This would prevent a massive sell-off, at least temporarily. Momentum investors did not fret because the stock price would not fall suddenly. Short-sellers will not mind waiting longer for AMC shares to fall slowly.\nPrice Target and Your Takeaway\nOnly one analyst rates AMC stock as a “buy.” The highest price target is $16 and the average is $5.84,according to Tipranks. Still, AMC’s stock price movement is unpredictable on a daily basis. The stock direction shifts as market opinion changes intraday. The volatility may attract day traders but investors seeking an undervalued business with profit growth upside for the future. Investors should leave the trading to speculators, particularly those who play on momentum.\nEven in the best-case scenario, fundamentals are not getting better enough to justify buying the stock at this time. Speculators are taking high risks, too. As with nearly all meme stocks in the last year, momentum fades. When trading volume dries up, the stock often falls permanently.","news_type":1},"isVote":1,"tweetType":1,"viewCount":70,"commentLimit":10,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"symbols":[],"verified":2,"subType":0,"readableState":1,"langContent":"EN","currentLanguage":"EN","warmUpFlag":false,"orderFlag":false,"shareable":true,"causeOfNotShareable":"","featuresForAnalytics":[],"commentAndTweetFlag":false,"andRepostAutoSelectedFlag":false,"upFlag":false,"length":3,"xxTargetLangEnum":"ORIG"},"commentList":[],"isCommentEnd":true,"isTiger":false,"isWeiXinMini":false,"url":"/m/post/804552200"}
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