AMC Entertainment Holdings (NYSE:AMC) is currently priced at 7.85, recorded a loss of 3.34% in a day and a 3-month decrease of 81.06%.
AMC Entertainment Holdings (AMC) stock plummeted to an all-time low after the company announced it would sell up to 40 million shares of its Class A common stock.
The sale will be conducted through an “at-the-market” offering program, which means that AMC can sell shares at any time and at any price. The company plans to use the proceeds to bolster liquidity and repay debt.
AMC warned investors that purchasing its stock is “highly speculative and involves risk.”
The move comes less than a month after AMC received court approval to convert its AMC Preferred Equity (APE) shares into common shares. AMC also announced a 1-for-10 reverse stock split, which reduced the number of outstanding shares but also increased the price per share.
In summary, AMC is selling shares to raise money to bolster liquidity and repay debt. The stock has been volatile and risky in recent months, and investors should be aware of these risks before purchasing shares.
The News drove short selling
| Market Date | FINRA Non-Exempt Volume | FINRA Exempt Volume | FINRA Short Volume | FINRA Total Volume | FINRA Short Volume Ratio | ||||
|---|---|---|---|---|---|---|---|---|---|
| 2023-09-08 | 7,560,255 | + | 487,805 | = | 8,048,060 | / | 18,778,544 | = | 42.86 |
| 2023-09-07 | 8,288,570 | + | 450,465 | = | 8,739,035 | / | 21,700,228 | = | 40.27 |
| 2023-09-06 | 19,756,339 | + | 1,133,817 | = | 20,890,156 | / | 45,991,562 | = | 45.42 |
| 2023-09-05 | 4,861,116 | + | 171,208 | = | 5,032,324 | / | 11,571,222 | = | 43.49 |
| 2023-09-01 | 5,303,811 | + | 281,629 | = | 5,585,440 | / | 11,932,797 | = | 46.81 |
| 2023-08-31 | 11,303,477 | + | 326,523 | = | 11,630,000 | / | 19,922,717 | = | 58.38 |
| 2023-08-30 | 16,166,285 | + | 841,463 | = | 17,007,748 | / | 34,060,306 | = | 49.93 |
| 2023-08-29 | 8,545,235 | + | 491,900 | = | 9,037,135 | / | 15,169,925 | = | 59.57 |
| 2023-08-28 | 6,717,371 | + | 505,182 | = | 7,222,553 | / | 12,328,510 | = | 58.58 |
| 2023-08-25 | 6,461,321 | + | 579,427 | = | 7,040,748 | / | 11,717,533 | = | 60.09 |
| Short Interest | 150,955,613 shares – source: NYSE |
| Short Interest Ratio | 3.50 Days to Cover |
| Short Interest % Float | 29.24% – source: NYSE (short interest), Capital IQ (float) |
Given that only 40m shares will be sold and the average Daily Volume is almost 10m the impact will be short lived and we expect to see AMC bounce back over $10 in the near future, possibly this week.
A short squeeze happens when a stock’s price increases rapidly, forcing short sellers to buy back the shares they borrowed to close out their positions. This can lead to a further increase in the stock price, as short sellers continue to buy back shares.
Short sellers are investors who borrow shares of a stock and sell them, in the belief that the price will fall and they can buy back the shares at a lower price and make a profit. If the stock price rises instead, short sellers lose money.
A short squeeze can be triggered by a number of factors, such as:
- Positive news about a company, such as a strong earnings report or a new product launch.
- Increased buying activity from other investors, which can drive up the stock price.
- A decline in the overall market, which can make short sellers more vulnerable.
When a short squeeze occurs, short sellers are forced to buy back the shares they borrowed to close out their positions. This can lead to a rapid increase in the stock price, as short sellers compete to buy shares.
A short squeeze can be very profitable for investors who are long on the stock, meaning that they own shares of the stock.
Shayne Heffernan
