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AMC Entertainment Holdings stock has recently hit a series of record lows, a far cry from the heady days of 2021 that turned the movie theater chain into a meme stock phenomenon.
AMC stock
AMC
They continued their decline on Wednesday, extending their losing streak to six days. The stock fell 2.5% to close at $4.11, another record low. AMC stock hit an all-time intraday high of $4.01 on Wednesday, based on available data dating back to Dec. 18, 2013, according to Dow Jones Market Data.
The stock price has fallen more than 98% from its all-time high closing price of $339.05 on June 2, 2021.
Tom Bruni, lead author of Daily Rip & Markets, a newsletter on Stocktwits, a social platform for investors and traders, told MarketWatch that the sharp decline in AMC’s stock price since mid-2021 has left many individual investors and He said institutional investors are walking away from stocks out of fear.
Related: AMC stock continued to fall, hitting new intraday lows and closing at another record low.
“However, since the reverse stock split and APE stock conversion last August, bankruptcy has been taken off the table, allowing the company to focus on its core business of selling movie tickets and concessions.” You mentioned stock units. Unfortunately for investors, this initiative has been slow to gain traction. ”
AMC turned profitable, reporting its second straight quarter of positive net income in its third quarter results in November. But Bruni says investors are looking for more.
“For now, the company remains focused on reducing costs and diversifying its revenue streams, including through the AMC Stub membership program and Walmart-exclusive home popcorn deal,” he said. “So far, these efforts have significantly reduced losses, but consistent profitability remains weak, even though blockbuster products like Barbie and Oppenheimer have provided significant tailwinds this summer. It hasn’t improved. Most investors are exhausted after multiple quarters of disappointment and continue to worry about further dilution.”
The current losing streak is on pace to be AMC’s longest since losing for seven consecutive business days, which ended on August 29, 2023. AMC stock has also fallen for 11 of the past 12 days.
Related: Here’s what to expect from meme stocks in 2024
But Bruni pointed out that there is a core community of AMC investors who will likely stick with the company for life. “We have low messaging activity and low participation on our platform, which means it’s the same (small) group of people discussing stocks right now,” he told MarketWatch via email. “And even those in that community are struggling to remain confident, with our sentiment indicators reading ‘very bearish’ now and for most of the past six months.” ”
Shares of competitor Cinemark Holdings
C.N.K.
It closed 1.4% higher on Wednesday, but has declined in seven of the past 11 days.
Wedbush analyst Alicia Reese said these aren’t the easiest times for the movie theater industry. “Industry forecasts have been revised downwards as production delays related to the recent SAG-AFTRA strike led to a lack of theatrical content in January and February, resulting in fewer productions in 2024 than in 2023. ,” she told MarketWatch via email.
“AMC is in a poor position here compared to its peers, given that it has a significant amount of debt and that significant debt is due in 2026,” Reese said. The analyst said the company continues to dilute its equity even at low prices as it continues to pay down its highest-interest debt and maintains enough cash on hand to weather this year’s soft quarter. There is a high possibility that it will. “That said, we believe the theater environment should improve from 2019. [the fourth quarter]And 2025 should be another strong year,” Rees added.
Related: AMC CEO gives Taylor Swift ‘eternal gratitude’ as Eras Tour concert film makes history
Three years ago, movie theater chains struggled during the pandemic and became a meme stock phenomenon. Buoyed by his WallStreetBets crowd on Reddit, AMC took advantage of the stock price surge to enter the stock and bond markets, and in January 2021 he raised $917 million.
Since then, AMC has targeted a debt burden of over $5 billion in 2022. That year, the company initiated a special dividend on his AMC preferred stock units, and in 2023 he completed the conversion of APE to AMC common stock. As a result, a consolidation of 10 shares of common stock into 1 share will be carried out.
In December, AMC completed its latest on-market stock offering, raising approximately $350 million.
AMC stock is down 91.8% over the past 52 weeks, while the S&P 500 SPX is up 20.6%.
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