• Contact Us
  • Privacy Policy
  • Terms of Use
  • DMCA
Saturday, January 28, 2023
TheGreatNews.com
  • Home
  • MINDSET
  • WELL BEING
  • POSITIVE NEWS
  • WISDOM
  • PURPOSE
  • NEW TECHNOLOGIES
  • More Topics
    • ENTREPRENEUR
    • GREEN ENERGIES
    • SUCCESS
    • GOOD LIFE
No Result
View All Result
  • Home
  • MINDSET
  • WELL BEING
  • POSITIVE NEWS
  • WISDOM
  • PURPOSE
  • NEW TECHNOLOGIES
  • More Topics
    • ENTREPRENEUR
    • GREEN ENERGIES
    • SUCCESS
    • GOOD LIFE
No Result
View All Result
TheGreatNews.com
No Result
View All Result

Is AMC Entertainment Pulling a Fast One on the APEs?

in ENTREPRENEUR
Reading Time: 4 mins read
A A
Is AMC Entertainment Pulling a Fast One on the APEs?
Share Share Share Share Share

Related articles

These Labor Day Savings Are Too Good to Miss

Who Wins the Tug-of-War Going on in the Stock Market?

The world’s largest movie theater chain AMC Entertainment (NYSE: AMC) stock has recovered in recent weeks to being down just (-17%) for the year. The pandemic put the movie theater industry on the edge as the epicenter industry faced many bankruptcies with smaller theaters, independent theaters and Arclight. AMC was saved from the brink of bankruptcy thanks to the meme stock momentum spawned by the infamous GameStop (NYSE: GME) short squeeze of 2021. AMC CEO Adam Aron attributed the miraculous run in its stock to its legion of small investors known as Apes. He painted the stock rally as a movement for the little guy against the big evil hedge funds. Meanwhile, they managed to raise over a billion dollars in capital by selling stock (and diluting the shares) to keep the Company afloat until traffic returned. It did return in the form of 45 million tickets sold in its recent quarter as metrics improved across the board, except for the debt situation.


MarketBeat.com – MarketBeat

Improving Results But Still Bleeding

On Aug. 4, 2022, AMC released its fiscal second-quarter 2022 results for the quarter ending June 2022. The Company reported an earnings-per-share (EPS) loss of (-$0.20) excluding non-recurring items versus consensus analyst estimates for a loss of (-$0.23), beating estimates by $0.03. Revenues rose 162.3% year-over-year (YoY) to $1.17 billion falling short of the $1.18 billion consensus analyst estimates. The Company still had $121.6 million in GAAP losses but managed to cut down the cash burn dramatically from a year ago. The Company burned through $117 million in cash leaving it with $965 million of cash left on the balance sheet, half of what it had a year ago. Total liquidity at the end of the quarter was $1.176 billion. All good news if not for the massive debt which it hasn’t made a dent in for over a year. The Company has not been able to raise new capital since its outstanding shares nearing its authorized limit. Shareholders shot down attempts to authorize more shares.

More Blockbusters to Come in Q4

AMC CEO Adam Aron expects to slump in Q3 but end the year with a blockbuster Q4 2022 with the release of major blockbuster films. Fourth quarter scheduled releases include Avatar 2, Black Panther: Wakanda Forever from Disney (NYSE: DIS) and Black Adam starring Dwayne The Rock Johnson from Warner Brothers Discovery (NYSE: WBD).

Unleash the APEs

AMC declared a dividend in the form of AMC Preferred Equity (APE) units which will begin trading on the New York Stock Exchange under the symbol (NYSE: APE) on Aug. 22, 2022. The dividend is like a 2-for-1 stock split but instead of splitting 1 AMC common share into 2 AMC common shares, it will split 1 AMC common share into 1 AMC share and 1 APE share. APE shares have a $0.01 par value and have identical voting rights as the common stock.

A Non-Dilution Solution to Raise Capital?

This would keep the outstanding shares for AMC common stock the same thereby avoiding dilution of the common stock. However, it will create an identical number of APE shares. CEO Aron said APE shares could be converted to AMC common shares in the future upon shareholder proposal and approval to increase the outstanding shares. This would obviously cause dilution if approved, which is not likely. APE units allows AMC to raise more capital without technically diluting the existing common stock float. It enables the Company to perform capital raises to pay down some of its $12 billion in total liabilities mainly comprised of $5.35 billion in debt, $4.43 billion in leases and $2.6 billion in other debt. It won’t dilute its 516,820,595 shares of common stock, rather there will just be an additional 516,820,595 shares of APE units too.

What Happens to the Stock on August 22?

Technically the price of AMC common stock would be cut in half as it gets split into APE shares on a 1-for-1 basis distributed as a dividend to existing shareholders. For example, if AMC stock closes on Aug. 19, 2022, at $30 per share, then it may split to $15 for AMC and $15 for APE or a variation that will equate to $30 when combined together. This doesn’t account for any price gaps up or down come pre-market on Aug. 22, 2022. It could also trigger a sell-the-news reaction if shares rise into the split.

Is AMC Entertainment Pulling a Fast One on the Apes?

Chart Analysis

Using the rifle charts on the weekly and daily time frames provides a precision near-term view of the price action landscape for AMC stock. The weekly rifle chart bottomed out near the $9.72 Fibonacci (fib) level. The weekly rifle chart staged a rally that broke through the weekly 200-period moving average (MA) at $14.89. The weekly market structure low (MSL) buy signal triggered on a $14.22 breakout when the stochastic bounced up through the 20-band. The weekly uptrend has a rising 5-period MA at $18.41 and 15-period MA at $14.81. The weekly 50-period MA sits at $23.90. The weekly upper Bollinger Bands sit at $25.33. The daily rifle chart uptrend has a rising 5-period MA at $24 as shares bounced off the daily 200-period MA at $20.65. The daily 15-period MA is rising at $18.92 with daily 50-period MA rising at $15.30. The daily upper BBs sit at $28.17. Seasoned speculators seeking to take a position in AMC can watch for attractive price pullback levels at the $19.77 fib, $17.95 fib, $16.34 fib, $14.54 fib, and the $13.10 fib level. Upside potential targets on a short squeeze range from the $30.58 fib up towards the $39.90 fib level.

Credit: Source link

ShareTweetSendPinShare
Previous Post

Here’s How the Inflation Reduction Act Energizes Power Stock

Next Post

Here is a Simple 4 Stock Portfolio that Can Outperform the Market

Related Posts

These Labor Day Savings Are Too Good to Miss

These Labor Day Savings Are Too Good to Miss

August 30, 2022

Disclosure: Our goal is to feature products and services that we think you'll find interesting and useful. If you purchase them, Entrepreneur may get a small...

Who Wins the Tug-of-War Going on in the Stock Market?

Who Wins the Tug-of-War Going on in the Stock Market?

August 30, 2022

Did you know that the tug of war was actually an Olympic sport from 1900 to 1920. Now, I'm generally a person who embraces the new...

Macy’s Value Lies Beneath its Stores

Macy’s Value Lies Beneath its Stores

August 30, 2022

Retail department store chain Macy's (NYSE: M) stock has had a rollercoaster ride in the past two years as shares trade down (-32%) for the year....

Does Micron’s Dividend Increase Mean It’s Time To Buy?

Does Micron’s Dividend Increase Mean It’s Time To Buy?

August 30, 2022

Memory-chip specialist Micron Technology (NASDAQ: MU) is up 4% since its June 30 earnings report. It rose as much at 18%, peaking at $65.42 in mid-August,...

5 Mistakes to Avoid When Launching a Business in the Service Industry

5 Mistakes to Avoid When Launching a Business in the Service Industry

August 30, 2022

Opinions expressed by Entrepreneur contributors are their own. Many individuals, not necessarily entrepreneurs, dream of having their very own cafe. There is a riveting component to...

Next Post
Here is a Simple 4 Stock Portfolio that Can Outperform the Market

Here is a Simple 4 Stock Portfolio that Can Outperform the Market

US government must ensure responsible offshore wind development

US government must ensure responsible offshore wind development

How biodiversity loss could cause bankruptcy in some countries

How biodiversity loss could cause bankruptcy in some countries

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Weekly Updates

insurance

“Life Insurance and its Impact on Overall Well-being”

January 24, 2023
TheGreatNews.com

This is an online news portal that aims to provide the latest updates about mindset, well being, positive news, wisdom, purpose, new technologies, entrepreneur, green energy, success, good life and stuff like that around the world. Feel free to get in touch with us!

© 2021 - TheGreatNews.com - All rights reserved!

  • Contact Us
  • Privacy Policy
  • Terms of Use
  • DMCA
No Result
View All Result
  • Home
  • MINDSET
  • WELL BEING
  • POSITIVE NEWS
  • WISDOM
  • PURPOSE
  • NEW TECHNOLOGIES
  • More Topics
    • ENTREPRENEUR
    • GREEN ENERGIES
    • SUCCESS
    • GOOD LIFE

© 2021 - TheGreatNews.com - All rights reserved!