Many Wall Street experts were taken aback by AMC’s stock jump, fueled by headwinds from the global COVID-19 outbreak.
AMC Entertainment Holdings Inc (NYSE: AMC) shares increased by approximately 47 percent on Thursday, completing the day at $26.52. (with a 35.6 percent rise). In the meanwhile, during Friday’s pre-market, the AMC stock gained around 10%. The company’s rise was ascribed to speculative trading by WallStreetBets Reddit forum members, who, according to Bank of America stock analysts, made AMC the most popular stock. This enviable position was previously held by GameStop Corporation (NYSE: GME), AMC’s meme stock rival, which had witnessed a record 400% short squeeze in a single week earlier this year. However, GameStop’s stock rose just 4.8 percent on Thursday.
Furthermore, according to S3 Partners’ financial research, over 20% of AMC’s float shares have been sold short, compared to the ordinary US stock market average of 5%. Short sellers, on the other hand, lost $1.3 billion this week as stock prices skyrocketed. Most of them had to purchase back borrowed shares to avoid additional losses, which drove the rise even more. S3 Partners’ Ihor Dusaniwsky said AMC’s short sellers felt exposed early this month, which is why they pulled back.
Additional AMC Stock Notes
Many Wall Street experts were taken aback by AMC’s stock jump, fueled by headwinds from the global COVID-19 outbreak. In addition to decreasing theater capacity and the number of days movies are shown, the number of people attending movie theaters has reduced. Streaming service movie release dates have also shifted.
In addition, AMC’s obligations total $5 billion, including $450 million in postponed lease payments. The firm reported $148.3 million at the end of the first quarter, down 84.2 percent from a year ago. However, losses fell to 567.2 million, or $1.42 per share, from $2.18 billion, or $20.88 per share.
Despite this, the stock of AMC has increased by more than 1,200 percent since January. Furthermore, the company’s first-quarter sales totaled $1 billion in cash. This is a new high for the company since it was founded 100 years ago, and it is anticipated to keep it afloat until 2022.
Following the company’s stock’s rise, new retail investors have rushed to it, resulting in a near-tripling of its value. AMC was valued at $5.8 billion at the end of 2019, but it had increased to an estimated $13.4 billion by Wednesday. To make up for the months of inadequate income, the movie theater chain will need to improve its functioning, including the number of guests and theater days.