Is AMC Entertainment pulling fast stuff with APE?


Shares of AMC Entertainment (NYSE: AMC), the world’s largest movie theater chain, have recovered in recent weeks and are down only slightly (-17%) for the year. The pandemic has put the movie theater industry in jeopardy as the epicenter industry faced numerous bankruptcies in smaller theaters, independent theaters and Arclight. AMC has been saved from the brink of bankruptcy thanks to the meme strain momentum created by 2021’s infamous GameStop (NYSE: GME) short squeeze. He portrayed the stock market rally as a movement for little guys against big evil hedge funds, meanwhile selling shares (and diluting shares) to keep the company alive until traffic recovers. This allowed him to raise over $1 billion in capital. With the exception of the debt situation, metrics have improved across the board, so it’s back in the form of 45 million tickets sold in the most recent quarter.



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Improves results but still bleeds

On August 4, 2022, AMC announced results for the second quarter of fiscal year 2022 for the quarter ending June 2022. Excluding non-recurring items, the company reported a decline in earnings per share (EPS) of (-$0.20) compared to analyst consensus forecasts. (-$0.23) loss, $0.03 more than estimated. Revenue increased 162.3% year-over-year to bring him to $1.17 billion, falling short of analyst consensus forecast of $1.18 billion. The company still had his GAAP loss of $121.6 million, but was able to cut cash burn significantly from a year ago. The company ran out of his $117 million in cash, leaving him with $965 million in cash on the balance sheet, half of what he had a year ago. Total liquidity at the end of the quarter was $1,176 million. All good news if it weren’t for the massive debt it hasn’t made a dent in over a year. Shareholders have fought off attempts to approve more shares.

More Blockbuster Coming In Q4

AMC CEO Adam Aron expects a weak third quarter, but wraps it up with blockbusters with major blockbuster movie releases in the fourth quarter of 2022. Releases scheduled for the fourth quarter include Disney’s (NYSE: DIS) Avatar 2, Black Panther: Wakanda Forever, and Warner Bros. Discovery’s (NYSE: WBD) Black His Adam starring Dwayne the Rock Johnson. increase.

Unleash the APE

AMC has declared a dividend in the form of AMC Preferred Stock (APE) units, which will begin trading on the New York Stock Exchange on August 22, 2022 under the symbol (NYSE: APE). Dividends are like 2 to 1. However, instead of splitting one share of AMC common stock into two shares of AMC common stock, one share of AMC common stock will be split into one share of AMC stock and one share of his APE stock. APE stock has a par value of $0.01 and has the same voting rights as common stock.

An undiluted solution to raise capital?

This keeps the number of outstanding shares of AMC common stock the same, thereby avoiding dilution of common stock. However, the same number of his APE shares are created. CEO Aaron said APE’s shares could be converted into AMC’s common stock in the future, subject to shareholder proposals and approval to increase the outstanding shares. If approved, this would obviously cause dilution, which is unlikely. The APE unit will allow AMC to raise more capital without technically diluting its existing common stock float. This will allow us to raise capital to pay down a portion of our total debt of $12 billion, which primarily consists of $5.35 billion in debt, $4.43 billion in leases and $2.6 billion in other liabilities. increase. Instead of diluting the 516,820,595 shares of common stock, only add his 516,820,595 shares of the APE unit.

What will happen to the stock price on August 22nd?

Technically, the price of AMC’s common stock will be cut in half as it is split 1 for 1 into APE shares as a dividend to existing shareholders. For example, if AMC stock closes at $30 per share on August 19, 2022, it could split into $15 AMC, $15 APE, or $30 worth of moves combined. I have. This does not take into account any increase or decrease in price differentials before the market on 22nd August 2022. It can also provoke a buy-sell reaction if the stock rises towards a split.

Is AMC Entertainment Pulling Apes Fast?

chart analysis

Rifle charts on weekly and daily timeframes give you an accurate short-term picture of the price action of AMC stocks.Weekly Rifle Chart Bottoms Near $9.72 Fibonacci (fib) levels. The weekly rifle chart staged a rally to top the weekly 200 period moving average (MA) at $14.89. The weekly market structure low (MSL) buy signal was triggered at the $14.22 breakout when the Stochastic jumped above the 20 band. In the weekly uptrend, the 5 period moving average is up at $18.41 and the 15 period moving average is up at $14.81. The weekly 50 period moving average is $23.90. The top weekly Bollinger Bands is $25.33. The uptrend on the daily rifle chart has seen the 5-period moving average rise to $24 as the stock bounced off the 200-period MA at $20.65. The daily 15 period moving average is up to $18.92 and the daily 50 period moving average is up to $15.30. The daily cap BB is $28.17. Experienced speculators looking to take a position on the AMC can see attractive price pullback levels at the 19.77 Fib, 17.95 Fib, 16.34 Fib, 14.54 Fib, and 13.10 Fib levels. Potential target elevation with short squeeze range from $30.58 fib to $39.90 fib level.



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