Is AMC Entertainment growing fast on APE?

The world’s largest cinema chain AMC Entertainment (NYSE: AMC) In recent weeks, the stock has recovered to only be down (-17%) for the year.This Pandemic Putting the Cinema Industry on the Edge Epicenter Industry Facing the bankruptcy of many smaller theaters, independent theaters and Arclight.Thanks to AMC from the brink of bankruptcy meme stock momentum by the notorious GameStop (NYSE: GME) short squeeze 2021. AMC CEO Adam Aron credits his stock’s miraculous rise to his army of small investors called Apes. He portrayed the stock market rally as a movement of little men against evil hedge funds. At the same time, they managed to raise more than $1 billion by selling (and diluting) their stock to keep the company afloat until traffic resumes. It did come back in the form of 45 million tickets sold in the most recent quarter, as metrics improved across the board except for the debt situation.

Improved results but still bleeding

On August 4, 2022, AMC released its fiscal 2022 second quarter results for the quarter ended June 2022. The company reported an earnings-per-share (EPS) loss (-$0.20), excluding non-recurring items, while analysts’ consensus estimate was for a loss (-$0.23), beating expectations by $0.03. Revenue rose 162.3% year over year to $1.17 billion, missing analysts’ consensus estimate of $1.18 billion. The company still had a GAAP loss of $121.6 million, but managed to significantly reduce cash burn from a year ago. The company burned through $117 million in cash, leaving $965 million in cash on the balance sheet, half what it was a year ago. Total liquidity at the end of the quarter was $1.176 billion. All good news if it weren’t for the massive debt it hasn’t reduced in over a year. The Company was unable to raise new capital as its outstanding shares were approaching its authorized limit. Shareholders rejected attempts to authorize more shares.

More blockbusters to hit theaters in the fourth quarter

AMC CEO Adam Aron expects third quarter decline, but end of year blockbuster Major blockbuster releases in Q4 2022 Movie. Fourth-quarter scheduled releases include Avatar 2, Black Panther: Wakanda Forever, from Disney (NYSE: DIS) Dwayne Johnson starring Black Adam from Warner Bros. Discovery (NYSE: WBD).

release APE

AMC has declared a dividend in the form of units of AMC Preferred Stock (APE), which will begin trading on the New York Stock Exchange on August 22, 2022 under the symbol (NYSE: APE). Dividends are like a 2-for-1 stock split, but instead of splitting 1 share of AMC common stock into 2 shares of AMC common stock, 1 share of AMC common stock is split into 1 share of AMC and 1 share of APE. APE stock has a par value of $0.01 and has the same voting rights as common stock.

A non-dilutive solution to raising capital?

This will keep the outstanding shares of AMC’s common stock unchanged, thereby avoiding dilution of the common stock. However, it will create the same number of APE shares. CEO Aron said that in the future APE shares may be converted into AMC common stock following shareholder proposal and approval for an increase in outstanding shares. If approved, this would obviously lead to dilution, which is unlikely. APE units allow AMC to raise additional capital without technically diluting existing common stock outstanding. It enables the company to raise financing to pay down some of its $12 billion in total liabilities, which consist primarily of $5.35 billion in debt, $4.43 billion in leases and $2.6 billion in other debt. It will not dilute its 516,820,595 ordinary shares, but only add 516,820,595 APE units.

What will happen to stocks on August 22?

Technically, the price of AMC’s common stock will be halved as it is split 1-for-1 into APE shares to be distributed to existing shareholders as a dividend. For example, if AMC stock closes at $30 per share on August 19, 2022, then AMC’s share price may split by $15 and APE’s share price may split by $15, or the combined equivalent of $30. This does not take into account any price gap ahead of the August 22, 2022 launch. If the share price rises, it could also trigger a sell news reaction.

graph analysis

use Rifle Chart Provides a precise near-term view of AMC stock price action patterns on weekly and daily time frames.Weekly Rifle chart bottomed near $9.72 Fibonacci (fib) levels. The weekly Rifle chart staged a rebound, breaking above the weekly 200-period moving average (MA) at $14.89.weekly Market Structure Low (MSL) A buy signal was triggered on the breakout of $14.22 when the Stochastic rebounded past the 20 band. The weekly uptrend has a rising 5-period MA at $18.41 and a 15-period MA at $14.81. The weekly 50-period MA is at $23.90. The weekly Bollinger Band is capped at $25.33. The daily rifle chart’s uptrend 5-period moving average rose to $24 as shares rebounded from the daily 200-period moving average to $20.65. The daily 15-period moving average rose to $18.92 and the daily 50-period moving average rose to $15.30. The daily capped BB price is $28.17. Seasoned speculators looking to take a position in AMC can watch for attractive price retracement levels at the $19.77, $17.95, $16.34, $14.54 and $13.10 Fibonacci levels. Upside potential targets for the short-term squeeze range from $30.58 to $39.90.