AMC - AMC Stock Soars 15% as Meme Trading Heats Up
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Shares of AMC Entertainment (NYSE:AMC) are flying higher as it appears meme stocks are back in business. Based on the latest data, AMC stock carries a short interest as a percentage of float of 18.65%. That’s equivalent to 96.16 million shares sold short, or a volume of $1.48 billion. In addition, it would take 2.3 days to fully cover the shares sold short.
The movie theater company reported its second-quarter earnings last week. Revenue came in at $1.2 billion, which was above the consensus analyst estimate of $1.17 billion. Meanwhile, around 59 million moviegoers showed up at AMC theaters globally, up 168% year-over-year (YOY). AMC also reported an adjusted earnings per share, or EPS, loss of 20 cents, which beat the analyst EPS estimate of a loss of 23 cents.
Profitability still remains an issue, as the company reported a net loss of $121.6 million. CEO Adam Aron stated profitability was hampered by a write-down in Hycroft Mining (NASDAQ:HYMC), which fell by 48% during the quarter.
Last week, AMC recorded a massive gain of 52.3%. That’s the biggest weekly gain since June 4 of last year, when the stock soared higher by 83.4%.
AMC also announced it would give its a shareholders a special dividend in the form of AMC preferred equity units. Now, it appears AMC stock is squeezing higher on this news.
AMC Stock Heats Up on Meme Stock Return
Aron characterized the special dividend as “perhaps the single biggest action we will take in all of 2022 to fundamentally strengthen AMC for the long term.”
The date of record for the dividend will fall on Aug. 15. Shareholders will receive one share of APE for each share of AMC owned. In total, 516.82 million APE shares will be issued. Furthermore, AMC has reserved the right to issue an additional 4.5 billion APE shares after the initial batch is issued. The dividend will be paid after the market close on Aug. 19, while the ex-dividend date will occur on Aug. 22.
The new APE offering will provide the company with much-needed cash and “dramatically lessens any near-term survival risk for AMC.” Furthermore, AMC has $5.5 billion in outstanding debt. Much of this was taken on during the coronavirus pandemic to maintain operations. Analysts from both Wedbush and Benchmark believe the APE offering will offer a chance to reduce this outstanding debt.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
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