To The Moon

After months of overhang since its string of lawsuits and a dramatic crash in stock price by over 40% so far this week on worries over stock dilution, dust has finally settled and $AMC Entertainment(AMC)$ is slated to implement its reverse 1-for-10 split of its common stock and APE stock conversion to enable the struggling movies theatre chain to raise fresh funds through issuing new equities. Earlier this month AMC’s revised stock-conversion plan was approved by the court after the original plan was blocked last month.

Once a meme-stock darling that propelled its stock price to great heights unjustified by its weak fundamentals amidst restrictions at the peak of the COVID pandemic that saw its many theatres vacant. While the pandemic eases and blockbuster titles are released, gradual transition to the new normal has not brought huge crowds back to its theatre halls yet, and the company is still crumbling under its mountains of debts. Hence, the ability to raise capital via equity injections is its only lifeline.

With the overhang removed, some analysts are already rushing to upgrade the stock. With it remains to be seen how AMC is able to reinvent itself to stay relevant post pandemic amidst rising competitors no less from online streaming service providers the likes of $Netflix(NFLX)$ , $Walt Disney(DIS)$ and $Amazon.com(AMZN)$ Bullish, and while investors braces for more stock dilution as the company is expected to need additional equity capital in the near future, I think the AMC stock is due for a brief relief as it finds support from its drastic falls over the past few trading sessions.

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