What is AMC Entertainment and Why its Stock Price Surged 2900% this Year?
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AMC Entertainment Holdings is an American-based movie theatre chain, and is the largest movie theatre chain in the world. The company was founded in the year 1920, with its headquarters located in Leawood, Kansas. It has faced a lot of financial downturns due to the recent Covid-19 crisis. Let’s look at how AMC Entertainment has seen a surge in its share price of around 2,900% in this year.
AMC Entertainment – Latest News
Share price of AMC Entertainment
Reason for the Extreme Rise in Share price of AMC Entertainmnet
AMC Entertainment Warning to its Investors
FAQ
AMC Entertainment – Latest News
The AMC Entertainment had seen a recent surge in its share price, which touched an all-time high on 2nd June 2021. The stock is considered to be a meme stock as the increase in the stock price was driven because of the hype over the social media channels.
The hot rally on the stock price is believed to be driven by the retail investors of Reddit. However, it is considered that one of the minor reasons for the surge in the share price is because certain investors are optimistic about the theatre chain as the Covid cases have come under control and the crowd would venture back into the theatres.
Share price of AMC Entertainment
The stock had seen a surge of around 120% on 2 June 2021, which hit the all-time high of USD 70 and fell slightly. The stock provided a return of around 90% in one session. The next day the rally was interrupted due to the company itself.
On 3 June 2021, the company had sold around 11 million shares and raised more than USD 500 million, where the investors did not stay with the company’s decision. The share had seen a fall on that particular day of around 18 % and closed at USD 51.34.
The company was under a potential bankruptcy in the year 2020 and now has seen a surge in its stock price of more than 3000% for the year 2021. In this quarter alone the stock price of AMC has provided a return of 500% and 140%, as seen in the first week of June 2021. The market capitalization of the company has increased to more than USD 32 billion.
Seema Banerjee
Reason for the Extreme Rise in Share price of AMC Entertainment
Most of the analysts have agreed that the stock price of AMC has seen a surge not because of the fundamentals but because of the hype created on the social media platforms. They have conveyed that the surge in the price of stocks can be seen as long as it gets attention.
It is said that the retail investors on Reddit had joined back together in order to hurt the professional short sellers that were betting against the AMC stock. At the same time, AMC had announced that they would provide free popcorns to their new investors who had backed them when they visit AMC for watching a movie.
AMC Entertainment Warning to its Investors
The company’s stock price had been trading at 20% up and saw a fall of 18% soon after they announced the sale of 11 million stocks. The sale of 11 million stocks has further helped the company in increasing its share price to USD 584 million as capital.
AMC has also recognized the strangeness of the situation which was claimed by the experts. As a result, the company had issued an unusual warning to its shareholders. The company warned its shareholders against investing in its Class A common stock. It has conveyed that if the shareholders were ready to incur the risk of losing the entire amount invested in the shares or a partial amount, they could continue to stay invested.
PV Vyshnavi
Conclusion
The share of AMC has received a lot of attention from the Indian investors as well as those from South Africa. The largest theatre chain was one of the five most traded stocks on the American stock exchange on Vested Finance and Stockal. These are two Indian focused trading platforms, and AMC was much more popular than Tesla, Facebook and Shopify.
FAQ
What is the biggest movie theater company?
AMC Entertainment is one of the biggest movie theater company with 959 around the world.
Who are AMC Theaters' competitors?
Regal, Cinemark, and Cineplex are some of the top competitors of AMC Entertainment.
What is the Revenue of AMC Entertainment?
The Revenue of AMC theatre in 2020 was 1200 million US dollars.
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