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AMC Entertainment Holdings Files To Sell Up To 11.55Mln Shares

Tiger Newspress2021-06-03

AMC tumbles 10% after new stock sale announcement, wipes out 20% premarket rally.

AMC Entertainment shares erased a 20% rally and plunged double digits in premarket trading on Thursday following a stock sale announcement.

The meme stock last traded down 10% after soaring more than 20% earlier Thursday before markets opened.

AMC said in a regulatory filing that it may offer and sell from time to time up to an aggregate of 11.55 million shares of its Class A common stock.

The move comes after AMC soared 95% in the regular trading session Wednesday to close at an all-time high of $62.55. Its previous closing record of $35.86 was reached in 2015, according to FactSet data.

AMC’s stock spiked as it hit an intraday high of $72.62, well above its previous intraday record of $36.72.

In a similar occurrence seen in January with the meme stocks like GameStop, defiant short-sellers have increased their bets against AMC shares over the last month, possibly fueling the move higher. About 18% of the AMC shares available for trading are still sold short through Wednesday, according to S3 Partners.

On Wednesday, short-sellers lost $2.8 billion as the stock surged, according to S3. That brings their year-to-date losses to more than $5 billion, according to S3.

Short sellers like hedge funds borrow the stock from an investment bank and sell it in the hopes of buying it back at a lower price and returning the shares, pocketing the difference. However, when a stock surges higher, a so-called short squeeze can occur where investors are forced to buy back the stock to cut their losses.

Trading was halted several times Wednesday as shares were up more than 100% at one point. At the end of the day, more than 710 million shares exchanged hands. That’s nearly double the number of AMC’s shares outstanding. The company’s 30-day average volume is just 143 million shares.

Retail investors — many active on Reddit’s WallStreetBets forum — led the AMC rally, and AMC executives have taken note. On Wednesday, the company announced a new portal to connect with individual investors and offered free popcorn, exclusive screenings and other perks to those who hold its stock.

JPMorgan noted that in the last week, retail order flow into AMC jumped to $583 million, 6.9 standard deviations above the average level of the last one year. According to their quantitative strategy, this kind of imbalance can lead to more outperformance by the stock in coming weeks.

AMC shares are up 2850% so far this year, bringing its market capitalization to more than $31 billion. That makes it worth more than stocks like Delta Air Lines, State Street and Best Buy.

Wednesday’s wild trading activity comes even after an investment firm reportedly sold off its stake in the company. On Tuesday, AMC revealed it sold 8.5 million newly issued shares to Mudrick Capital, the latest in a series of capital raises for the stock. The hedge fund later sold all of its AMC stock for a profitthat same day, according to Bloomberg News.

Most Wall Street analysts believe AMC shares will plummet eventually. The average 12-month target price of analysts is $5.11, according to FactSet.

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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Comment209

  • Thiogui
    ·2021-06-13
    Good
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  • Thiogui
    ·2021-06-13
    ????
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  • FluffyOcto
    ·2021-06-10
    ??
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  • shawnhuat
    ·2021-06-05
    response please
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    • A68
      Ok Boss
      2021-06-07
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  • KTran
    ·2021-06-04
    Patiently waiting 
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    • shawnhuat
      [开心]
      2021-06-05
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  • skins7777
    ·2021-06-04
    This is FUD
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  • freddo298
    ·2021-06-04
    Watch the CEO's interview with trey's trades on yt and you'll know this is pure fud
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  • freddo298
    ·2021-06-04
    fud the sale is done all 11.55m shares sold, only 46k shares left if they even gna sell more. 
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  • Geektrader
    ·2021-06-04
    I’m not rich but I resist, If I’ve gotten into the high and hold, why should I sell the lows. In fact I’d buy in MORE of the lows, not for me but for my fella apes and my future kids.i don’t care what the media’s say, cause everyone knows the only things apes hearing is the moonId hold for you, you hold for me cause Apes are strong, together. #amcstrong ???
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  • Wahahoho
    ·2021-06-04
    Dooms day?
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    • shawnhuat
      [汗颜]
      2021-06-05
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  • Diamondh
    ·2021-06-04
    Buy the dip!! Don’t listen to the sheep in the comments section hating, MOASS has just begun!! ???
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  • ynwaben
    ·2021-06-04
    Please like and comment. Volatile
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    • Acella
      ?
      2021-06-05
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    • kenong62
      done
      2021-06-04
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  • Klord
    ·2021-06-04
    Power of retail investors 
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  • Sul
    ·2021-06-04
    Where's the update to tell people that it's already done? You posted the FUD instantly but when it's good news, you're taking your time
    Reply
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  • KLok
    ·2021-06-04
    That's bad.....
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  • Jakee9572
    ·2021-06-04
    This is such B*llshit, this is why you can't listen to media, the shares were sold well before now it's already done before this huge run, today is another short attack that we hold through!
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  • vilevan
    ·2021-06-04
    Buy up the dips! DIAMOND HANDS till it goes parabolic!
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  • joshuachin
    ·2021-06-04
    How much short float do we have left?
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  • Terger
    ·2021-06-03
    If it's the news that the price dropped, then the sellers are dumping for the wrong information.
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  • Jeffdad
    ·2021-06-03
    Brave
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    • ACECHUA
      Good
      2021-06-04
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