![]() A New Reason to Buy AMC Stockīefore entering the potential trade that has emerged with AMC Entertainment, let’s look at the backstory. However, whether it is worthwhile to make this trade is another question entirely. That’s because these events may result in yet another “short squeeze” for shares. This has been frustrating for management and frustrating for “smart money” investors trying to arbitrage the transaction (more below), However, everyday individual investors, in theory, may have a chance to make a quick profit from this latest twist of events. Unsuccessful in its efforts to settle this litigation earlier this month, this conversion implementation has been delayed. ![]() There are many ways to “play” AMC Entertainment (NYSE: AMC), but one that may be piquing the interest of retail traders today has to do with the latest news regarding the conversion of AMC Preferred Shares (NYSE: APE) into common shares of AMC stock.Īs you may be aware, there has been some legal controversy regarding the planned APE stock conversion. īret Kenwell is the manager and author of Future Blue Chips and is on Twitter. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines. On the date of publication, Bret Kenwell did not have (either directly or indirectly) any positions in the securities mentioned in this article. ![]() However, if investors opt not to trade AMC, I certainly can’t fault them. For the moment, AMC’s charts remain bullish and I won’t fight that momentum. In the case of AMC, I will default to the technicals. However, we’re in an era where valuations don’t matter for certain stocks. By traditional standards, most investors would also consider AMC stock overvalued. The stock has never traded for the type of sales multiple it has now. AMC also isn’t forecast to be profitable this year or next.ĭo these observations, combined with the fact that AMC stock trades with a $26 billion market capitalization, make AMC overvalued? However, that would still be shy of the $5.4 billion in sales that AMC did 20. If those estimates come to fruition, AMC should do about $4.56 billion in sales next year. In 2022, estimates also call for a 90% boost in revenue. As such, analysts expect a 93% rebound in revenue this year. Breaking Down AMC EntertainmentĪMC Entertainment is seeing a massive rebound in its business as consumers flock back to theaters. While we don’t know what it would be - or if it will even come to fruition - a partnership between AMC and GameStop could trigger another one of these Reddit Rallies. Instead, I’m curious about the rumors floating around between AMC and GameStop working on a potential partnership. GameStop recently reported earnings, and while the stock is trying to work off its decline, I’m not focused on the results. There was no real or meaningful news to get it started. The moves come in a hurry - they’re violent and they’re unpredictable.įor example, in late August GME stock erupted 36.5% at its highs in a single day, while AMC stock jumped 31% at its highs. Whether it’s AMC, GameStop (NYSE: GME), BlackBerry (NYSE: BB) or something else. It’s hard to ever rule out a Reddit Rally hitting these short-squeeze candidates. It also saps some of the stock’s bullish momentum. On the downside, failure to hold $48 and the 10-day moving average puts the 21-day moving average and $40 on the table. If AMC clears $56, the $60 resistance area is in play, followed by the high near $72.50. Above $50 could put the 61.8% retracement near $56 in play. As long as AMC can stay above $48 and the 10-day moving average, it’s okay on the long side. We now have a breakout over $48, as AMC stock contends with $50.
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