AMC Entertainment Stock Recovers All Pandemic Losses, Tripling In ValueJanuary 27, 2021
Shares of AMC Entertainment have skyrocketed more than 200% in a wild start to the trading day, recovering to levels not seen since long before the coronavirus pandemic.
At more than $16 a share, AMC is back to where it was in the heady days of 2018, the year domestic box office set an all-time record.
Playing a key role in the upswing has been a flurry of action driven by traders on Reddit and the #SaveAMC hashtag. While overall markets are significantly down thus far in the session, select shares are seeing astronomical gains. GameStop, the poster child for the phenomenon, has soared past $300 a share, extending a recent frenzy fueled by day traders swapping tips online.
Short positions also are a consideration and often prompt fluctuations in certain stocks. Individual investors, using Reddit and other online platforms, have piled into heavily shorted stocks like AMC, creating “short squeezes” for hedge funds and others betting the other way.
Stephen Colbert Lauds Joe Biden's Purchase Of 200M Coronavirus Vaccines: "America's Got A New Boyfriend And He Is Spoiling Us"
Other exhibition stocks like Cinemark, National CineMedia, Marcus Corp. and Imax also posted gains, and there has been some legitimately upbeat news for the theater business lately. A huge influx of vaccine doses has been promised by President Biden, and theaters have recently reopened in pockets of the country.
If AMC’s gains can be sustained, the largest movie theater chain in the world will have a head start on what would be a remarkable comeback. Overall box office revenue plummeted more than 80% in the U.S. in 2020 due to the pandemic and major markets like LA and New York have been closed since last March.
The company, backed by China’s Wanda Group and U.S. private equity firm Silver Lake, has long had a sizable debt load. The debt worries were compounded by revenue completely disappearing in 2020. Liquidity issues have remained a serious concern, with bankruptcy a looming scenario, though the company has shored up more than $900 million in fresh cash and CEO Adam Aron says it has ample liquidity to last through the latter part of 2021.
Read More About:
Source: Read Full Article