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Market Insights

Apeing back into AMC?

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Is it time to ape back into AMC? That’s the question bouncing around social media after AMC’s stock price completed the round trip.

We’ll probably never know whether it was all WSB or some savvy money managers driving the move. Either way, AMC has traded right back to the base of the breakout, bounced and broken through a local trendline and the 20 day moving average.

AMC Entertainment trading view one day chart

Now that the meme mania’s over, what’s the story?

Analysts are bearish. Price targets range from $1 to $35.10 at the extremes, although the median converges in the $8-$10 range. Either way, analysts don’t seem convinced of further upside.

But what do they know? Hardly anyone saw the mania coming last time, so perhaps it pays to keep an open mind here. CEO Adam Aron is “playing on offense”

AMC continues to play on offense and aggressively seek out opportunities to strengthen our company through strategic acquisitions. We announced this morning picking up our fifth and sixth former Arclight/Pacific theatres. In LaJolla, CA and Bethesda, MD.

Aside from adding theatres to the ranks, they’ve made a few shrewd moves lately. The biggest was a monster refinancing. CEO Adam Aron made a “New Years Resolution” at the start of 2022: Refinance the high interest rate debt taken on at the start of the pandemic.

That mission was accomplished just a month later. AMC was overwhelmed by investment demand and increased the offering from $500 million to $950 million. This allows them to pay back higher interest bonds (two large tranches raised at 10.5% & 15% during the pandemic) and reduce their overall interest rate to 7.5%.

AMC has also hired former Frito-Lay, Pepsico and Hostess Brands executive Ellen Copaken to the new position of Vice President, Growth Strategy. Her first job is to get AMC competing in the (multi-billion dollar) Popcorn industry.

Aron said: “Her executive ability combined with her significant grocery experience will be a vital asset to AMC as we explore and deliver on current and future opportunities, starting with our new popcorn initiative.”

AMC is also teaming up with Orange Comet to offer Walking Dead NFT’s to coincide with the release of the new series.

AMC will also air the final season of the popular Better Call Saul series. The series will be split into two parts, with seven episodes airing weekly from April 18th & the final six episodes starting on July 11th.

The lifting of pandemic restrictions looks likely to continue. Is this the start of a true comeback story for AMC? Given the difficulties they’ve faced in the pandemic things (so far) have turned out far better than first feared for the company. Saved by a crowd of Redditors?

The hard work begins now. Will the public flock back to theatres or stay at home and stream? AMC will be hoping the social animal spirits can’t be held back any longer…

Not investment advice. Past performance does not guarantee or predict future performance.

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