AMC Chief Expands Crypto Payments, Leaves Off Dogecoin

AMC Entertainment made a splash in the cryptocurrency industry by revealing it intends to support more than just bitcoin payments. In a surprise move, AMC CEO Adam Aron tweeted that the company plans to also accept Ethereum, Litecoin and Bitcoin Cash for movie tickets and concession transactions. One cryptocurrency that was conspicuously left off the list was Dogecoin.

The Dogecoin community has had AMC on their radar since Aron announced the bitcoin integration in August. YouTube talk show host Steven Steele pointed out that many Dogecoin investors also own shares of AMC’s stock, which would make both camps happy. Many Dogecoin fans expressed their surprise that Aron left out Dogecoin, calling it a big mistake, while others are holding out hope that it is just a matter of time.

Dogecoin bulls have been trying to get the meme coin more into the spotlight with hopes of driving the price up higher to the $1 threshold and beyond. The Doge price currently hovers at just below $0.24.

Crypto Push

Aron first revealed that the company would be integrating bitcoin payments during the movie chain’s Q2 earnings call. Since then, the meme-coin crowd has been sending him a message that Dogecoin also works well for payments, boasting transactions that are faster and cheaper than bitcoin.

Dogecoin can complete transactions in about one minute, while bitcoin blocks are completed in around 10 minutes. Thanks to second-layer technology such as the Lightning Network, bitcoin payments can be made in real-time, or in about the same amount of time it takes to send an email.

Tall Tale?

AMC’s announcement was also met with some skepticism, given that it came on the heels of the recent fake news involving Walmart and Litecoin. Scammers issued a fraudulent press release saying that the big-box retailer and the Litecoin project were teaming up, and it sent the markets into a frenzy. Litecoin initially spiked, but once Walmart and Litecoin denied any collaboration, those gains were quickly erased.

For AMC, the announcement came straight from the CEO’s Twitter account, which incidentally has yet to be verified.  AMC’s stock price is up fractionally on the day, while the bitcoin price is slightly lower.

AMC Entertainment Makes Strategic Moves in Year-End Push

AMC Entertainment is back in the driver’s seat. The movie chain, which has been capitalizing on its momentum as a meme-stock phenomenon, has made a couple of bold moves of late.

First, AMC is doling out $25+ million in an ad campaign featuring Nicole Kidman. Next, AMC CEO Adam Aron tipped his hand to a possible partnership with fellow meme stock GameStop on Fox Business, though he kept the details close to the vest. He did suggest that there could be some sort of “marketing effort” between the two companies if the talks are fruitful.

AMC’s shares were up more than 2% on Thursday and are inching closer to the $50 threshold.

$25 Million Ad Campaign

AMC is betting $25 million on the fact that Americans have become vaccinated from COVID and are experiencing cabin fever. The new ad campaign uses the slogan, “We make movies better.” The minute-long commercial spotlights Kidman at the movies as AMC looks to connect with consumers on an emotional level. The ad will launch during the MTV Awards this weekend.

Meanwhile, the movie chain is saddled with billions of dollars in debt on its balance sheet. But they also have $2 billion in cash plus liquidity, as of the end of Q2. In the end, it was worth the gamble for Aron and the AMC team.

The company is looking to attract consumers to its movie theaters with an enticing pipeline of films that are slated for the fourth quarter. In doing so, AMC has the opportunity to potentially bolster revenue and profits. As a result, Aron believes that the return on the ad campaign investment will be well worth it, according to his interview with Fox Business.

 

Glory Days

Aron said he is committed to “restoring this company to health” and getting through the latest wave of the pandemic. He wants to return AMC to its former glory. He explained how AMC’s shareholder base has flipped from being primarily institutionally owned to now being mostly held by retail investors. Individual investors have driven the stock up 2,300% this year, though AMC shares are off their high.

AMC is coming off the heels of a record Labor Day weekend in which more than 2 million movie-goers visited its U.S. theaters.

AMC’s Stock Soars After Record-Setting Holiday Weekend

Labor Day weekend was a success for AMC Entertainment, and the good vibes are spilling over to the movie chain’s stock price. More than 2 million movie-goers attended U.S.-based AMC theatres over the holiday weekend, which smashed the company’s old sales record from eight years ago, as pointed out by CEO Adam Aron. AMC attracted about 800,000 movie-goers to its international theaters across Europe and the Middle East.

AMC Milestone

In addition, AMC’s theater attendance has risen to above pre-pandemic levels, which is a barometer that corporate America continues to strive to surpass. Aron gave credit to Disney’s superhero film “Shang-Chi and the Legend of the 10 Rings,” a Marvel Studios creation. The movie generated more than $90 million in ticket sales, according to early estimates.

Aron stated in a press release that the blockbuster weekend has been “an important milestone” as they “steadily work to generate a recovery” for the business.  He expects the momentum to continue, noting that “as Hollywood releases movies, Americans eagerly want to return to movie theatres again.”

AMC Stock

Investors rewarded the stock, sending shares of AMC Entertainment close to 9%, catapulting the stock closer to the $50 level once again, a level it has not seen since July. Investors cheered the rally, which got an extra boost in about the last hour of trading.

According to financial analytics firm Ortex, the tally for short positions on AMC’s stock was $4.26 billion as of Sept. 1, which triggered losses of more than $1.2 billion from late August.

AMC shares are trading below their high of more than $70 reached in June, but they are up 2,300% year-to-date. The stock has been trading largely based on social media sentiment surrounding the meme stock. As AMC’s fundamentals continue to improve, however, its valuation might become more convincing.

One catalyst for the movie chain is its plan to begin accepting bitcoin payments by the end of the year. The movie has already drummed up excitement in the cryptocurrency crowd that has spilled over to Dogecoin, whose fans are hoping that AMC will also consider adding Doge payments. No word on whether Adam Aron plans to follow in Tesla’s footsteps and add bitcoin to the company’s balance sheet.

AMC Shares Soar 7% as Silver Lining Emerges

Shares of AMC Entertainment rallied nearly 7% on Monday, giving investors something to cheer about right out of the gate. The stock is inching closer to the USD 40 level once again after trading below the USD 30 threshold in early August.

Retail investors have been drawn to AMC largely based on its meme-stock status, which is tied to sentiment on social media. Nevertheless, AMC’s fundamentals appear to be strengthening in their own right.

Mass Vaccinations in Sight

AMC’s stock could be benefiting directly from a positive development out of the pharmaceutical sector. The U.S. FDA has given the green light to a COVID-19 vaccine made by Pfizer and BioNTech. The drug, which they are calling Comirnaty, will be made available to people as young as 16 years old.

Even though millions of Americans have already been inoculated, the FDA stamp of approval is expected to instill confidence that the drug is safe. With mass vaccinations in sight, the economy stands to benefit, including the entertainment industry and movie chains such as AMC.

In fact, AMC CEO Adam Aron on the company’s Q2 earnings call made a link between the strength of the balance sheet and vaccination levels. He stated,

“Vaccination rates have climbed quickly in 2021. And the counterintuitive result of this new Delta variant is that vaccinations likely will continue to rise, and vaccination increasing is very important for AMC and for the movie theater industry generally.”

David vs. Goliath

AMC Entertainment was founded more than a century ago in Kansas City, Miss. Now the company must transform itself to compete in the era of streaming entertainment in which on-demand platforms designed for mobile devices and computers have taken market share.

AMC’s Aron appears to be the person for the job. He is confronting the threat that movie studios pose by bypassing the theater experience in favor of releasing films to content streaming platforms first.

Movie studios and theaters have long had a love/hate relationship given the dependence that the cinema companies have on studios for their very survival. Since the pandemic hit, some major movie studios inked deals with movie chains such as AMC to soften the blow with a bigger piece of the profit pie as movies became available on demand.

In the interim, another way that AMC’s Aron is fighting back is by embracing the cryptocurrency revolution, with plans to accept bitcoin as a payment method for tickets and popcorn by the end of the year.

AMC’s Stock Rallies on Heels of Blockbuster Weekend

AMC Entertainment shares are rallying 6% on the heels of a good weekend at the box office. The gains couldn’t come soon enough for AMC investors, who have been on a roller coaster ride in August so far. AMC shares started the month at USD 37 only to fall below the USD 30 level on Aug. 4. The stock has been climbing higher since then in fits and starts.

Movie Sales

While AMC has proven to mostly trade on internet sentiment given its status as a meme stock, shares could also be reacting to some positive developments. The film “Free Guy,” which stars Ryan Reynolds, reportedly generated a better than expected USD 28.4 million in North American ticket sales across theatres. On a global scale, the movie brought in more than USD 50 million.

Investors aren’t the only ones celebrating. Reynolds revealed on Twitter that Disney is interested in a “Free Guy” sequel. Disney along with its subsidiary 20th Century Studios are behind the movie.

Analysts were anticipating sales of a lesser USD 15 million-17 million on fears that the rise of the delta variant would keep potential moviegoers at home. Clearly, they were wrong, as people put aside their COVID-related fears and ventured out for entertainment in droves.

Movie Theater Bump

AMC could continue to capture more of the ticket sales pie given the dynamics surrounding this particular movie. Steven Frankel, senior research analyst at Colliers Securities, is cited by Barron’s as saying that “Free Guy” will be available in theaters on an exclusive basis for a month and a half prior to making its way onto HBO Max.

Films associated with Disney typically will make their way onto Disney+ sooner, which gives theaters like AMC more competition. Disney decided, however, to give theaters a shot at exclusivity for “Free Guy” along with “Shang-Chi” and the “Legend of the Ten Rings” for a 45-day stretch. Disney CEO Bob Chapek reportedly attributed the decision to “recent signs of increased confidence in moviegoing.”

AMC was not the only movie chain stock to benefit. Investors also sent shares of Cinemark Holdings higher, with the stock rising 2% on the day. IMAX shares did not join the rally and instead were down fractionally.

 

AMC Could Face Movie Competition From Across the Pond

AMC Entertainment is just starting to get its sea legs in the stock market after a challenging pandemic year. Now that the economy has reopened, the threat of the delta variant notwithstanding, the movie chain could be facing yet another headwind in the form of competition from a distant contender.

British cinema company Cineworld is eyeing a public listing in the U.S. in hopes of raising capital to strengthen its balance sheet, according to reports. Cineworld is already publicly traded in London, and now it is considering bringing its Regal Cinema unit, which the company acquired three years ago, public in the U.S.

Similar to AMC, Cineworld has had to compete with streaming content. And also similar to AMC, Cineworld is saddled with debt. Worse, its balance sheet health took a hit while the economy was on lockdown. Cineworld has watched from the sidelines as shares of its U.S.-based competitor AMC have rallied thanks to the tailwind of individual investors, and it wants a shot at a similar fate.

Cineworld Capital

Cineworld is the second-largest cinema chain in the world,  and it was forced to temporarily close its theatres in the U.K. and in the U.S. when the pandemic hit.  The company was forced to lay off tens of thousands of workers at the time, and it has been exploring ways to raise capital ever since.

Management seemingly believes that getting on the radar of Wall Street analysts and investors will improve its liquidity, as it has done for AMC.

AMC Recovery

Meanwhile, AMC has been charting its own recovery path as it looks to reinvent itself among moviegoers and investors alike.

That turnaround is not yet complete, but the company sees a light at the end of the tunnel. AMC in Q2 amassed USD 1.25 billion in total equity and has access to USD 2 billion in liquidity.

AMC is currently the movie stock du jour in the U.S, and should Cineworld follow through with its idea of a U.S. listing, it would give investors another option. On the other hand, AMC’s stock is up nearly 5% on the day, so there could be enough demand to go around for the sector.

Dogecoin Investors Look to Get on Radar of AMC Chief

Dogecoin is currently the seventh-biggest cryptocurrency with a market cap of approximately USD 36 billion. The leading coins often jockey for position, with the exception of bitcoin and Ethereum, and Doge has been climbing up the ranks once again. August has been good to Dogecoin so far, with the price having risen from USD 0.20 to USD 0.27 in less than two weeks.

If the Dogecoin community has enough sway with corporate America, the meme coin could continue to rise. Dogecoin investors have watched as movie chain AMC Entertainment has touted bitcoin. AMC revealed in its Q2 earnings report that it plans to accept bitcoin payments by the end of the year. Now that it’s clear that AMC CEO Adam Aron has caught crypto fever, Doge investors are hoping that he will look their way.

Crypto-Friendly AMC

Doge fans are cheering AMC for being a progressive company on crypto, and they are asking the CEO to think even bigger. On Twitter, users are urging Aron to consider Dogecoin as a payment method too, touting features such as speedy and less pricey transactions in comparison to bitcoin.

Dogecoin is said to complete approximately 33 transactions per second vs. bitcoin’s seven TPS. The Dogecoin community is also playing to AMC’s meme-stock status considering that in the cryptocurrency industry, Doge similarly fits the bill as a meme coin.

Crypto investor David Gokhshtein, who is at the helm of blockchain payment platform PAC Protocol, made the point that he would be more willing to spend Doge at AMC theaters than bitcoin. The reason is that he is busy “stacking sats,” which is how bitcoin investors continue to accumulate more BTC rather than spend it. Gokhshtein reportedly has a USD 1 price target on Dogecoin.

Gaining Popularity

While Dogecoin investors look to make their way onto the radar of AMC, they have already captured the attention of cryptocurrency market data firm Chainalysis. The crypto data and software firm announced that it now covers Dogecoin, which it says boasts the “fourth-largest 30-day trading volume of all cryptocurrencies, with over USD 199 billion worth of transfers.”

It is clear that Dogecoin is one of the most popular cryptocurrencies. Chainalysis also points out, however, that Doge has been used in a number of crypto scams this year on social media and beyond. All of this attention combined has created greater demand for the firm to include Dogecoin in its coverage.

Today’s Market Wrap Up and a Glimpse Into Tuesday

Stocks retreated from their record levels and finished the day mixed as the oil price tumbled. The Dow Jones Industrial Average shed more than 100 points while the S&P 500 experienced modest declines. The tech-laden Nasdaq managed to end the day slightly higher.

Meanwhile, Brent crude oil fell more than 2% to below USD 70 per barrel, its lowest point in close to a month. Crude oil prices were hit by a one-two punch of renewed fears that the delta variant will weaken demand for the commodity while China’s oil imports have been on the decline.

In the cryptocurrency markets, the bitcoin price climbed nearly 4% higher despite an infrastructure bill that is advancing and places a target on the blockchain industry’s back with a crypto tax. Despite the setback, Fundstrat experts reportedly predict that the bitcoin price could still be barreling toward USD 100K by year-end.

Stock index futures are barely budging in after-hours trading.

Stocks to Watch

AMC Entertainment shares rallied almost 5% in the extended hours on the heels of the company’s Q2 earnings report. The movie chain reported stronger than expected revenue but still experienced a quarterly loss. AMC made a splash when CEO Adam Aron revealed on the earnings call that the company would accept bitcoin as a payment method for tickets and refreshments.

Shares of fantasy sports brand DraftKings finished the day higher by 1.5% after the company announced plans to buy Golden Nugget Online Gaming in a USD 1.5 billion stock deal. The acquisition will bolster DraftKings’ presence in the internet betting market, and it is expected to close in early 2022.

Shares of luxury consigned goods retailer The RealReal sank more than 6% in after-market hours on the heels of its quarterly results. The RealReal’s revenue fell short of Wall Street expectations. The company, which reported a net loss, continues to be challenged by consumer uncertainty due to the pandemic.

Look Ahead

Cryptocurrency exchange Coinbase is on tap to report its quarterly results on Tuesday. While the cryptocurrency industry hit a roadblock in the U.S. this week, investors will likely be focused on the number of users that Coinbase added. The stock continues to trade below its offer price of USD 381.

Cleveland Fed President Loretta Mester is expected to make remarks about inflation on Tuesday.

AMC Entertainment Comes Through in Q2, Stock Rallies

AMC Entertainment reported its long-awaited Q2 results, and investors are rewarding the stock. Shares of AMC rallied more than 3% in the regular session. Since the company’s earnings report was announced, the stock has tacked on another 4%-plus in extended-hours trading. The movie chain’s revenue came in at a stronger than expected USD 444 million as the company benefited from the reopening of the economy.

AMC Tailwinds & Headwinds

AMC’s results were buoyed by the reopening of theaters across the U.S. and internationally. Adam Aron, the company’s CEO, described the quarter as “transformational” thanks largely to “quarter-ending liquidity” of more than USD 2 billion, which is about twice its former peak.

Aron believes this cash and credit will help the company get through the pandemic uncertainties. Another potential tailwind is that ticket prices are inching higher and averaging USD 10.90 in the U.S., up 15% vs. pre-COVID-19 levels.

There are headwinds as well. AMC is not a profitable company and reported a loss of USD 344 million for the quarter. Worse, AMC was operating at a loss even prior to the pandemic as movie theaters have had to compete with the rise of streaming content. In addition, AMC is saddled with billions of dollars of debt on its balance sheet, which fuels some of the short interest in the stock.

AMC, however, is a meme stock, meaning that rather than trade on fundamentals, the price is fueled by internet sentiment. That meme-stock quality has seen the AMC price skyrocket as high as USD 70 per share in early June, though the stock is currently trading at about half of that level.

Retail investors hold the lion’s share of AMC shares, as per the CEO. These shareholders were invited to participate in the company’s earnings call, where Aron was prepared to answer some of their questions about the path forward.

Bitcoin Payments

AMC is also catching crypto fever and plans to accept bitcoin as a payment method by year-end. Doing so could help to motivate the cryptocurrency community to go to AMC theatres. CEO Adam Aron reportedly discussed the details on the company’s earnings call, saying that AMC is implementing the technology to accept bitcoin payments for tickets and at the concession stand, the latter of which has attractive margins.

Stock Market Bulls Take a Breather After Record Run

Stocks finished last week with the bulls in charge after the Dow Jones Industrial Average and S&P 500 both finished at all-time highs. The tech-heavy Nasdaq bucked the upward trend and fell slightly.

For the week, all three of the major stock market indices finished in the green. Investors were feeling confident amid an employment report that showed the economic recovery is humming along.

The July labor market report showed that 943K jobs were added to the U.S. economy last month, which was more than economists had predicted. The unemployment rate now hovers at 5.4% vs. estimates of 5.7%.

As the economy grows stronger, policymakers could decide to step back from their bond-buying activity. As long as investors are focused on corporate America’s robust profits, however, the markets have been in the clear.

Stock index futures are taking a breather on Sunday evening ahead of Monday’s open with a downward slant. Meanwhile, lawmakers continue to debate the infrastructure bill on Capitol Hill.

Stocks to Watch

Meme stock AMC Entertainment is poised to release its Q2 earnings results on Monday. AMC shares have been trading cautiously so far in August. The company’s management team will be fielding questions from individual investors on the earnings call. Investors will have to wait until after the market closes for AMC’s results.

BioNTech, the company that is behind one of the COVID-19 vaccines with partner Pfizer, will also report its quarterly results on Monday.

Gaming stock Zynga fell more than 18% on Friday. The company, which is behind the FarmVille brand, suffered an exodus of gamers in Q2 amid the reopening of the economy as consumers venture out more. TakeTwo Interactive and Activision Blizzard spotted similar behaviors.

Shares of commission-free trading app Robinhood advanced 8% on Friday to USD 55 per share, well above the USD 38 IPO price. While Robinhood does not have meme-stock status, investors are bracing for it to continue trading like one for a while.

Look Ahead

On the economic front, investors will be looking ahead to Wednesday when the Consumer Price Index (CPI) for July will be released. On Friday, investors will further be able to gauge consumer confidence when the University of Michigan Consumer Sentiment data comes out.

AMC Chief Braces for Questions on Dividend and Debt

AMC Entertainment CEO Adam Aron has given his shareholders more skin in the game. Aron has paved the way for retail investors to ask questions during the Q2 2021 earnings webcast, which will be a first for the company. The popular CEO has already begun to vet some of the questions, saying that they are “really smart” and calling the ideas that have been presented fascinating.

Individual Investors Want to Know

Nearly 4,200 questions have poured into the Say app from retail investors so far. Among the most popular questions is whether AMC will resume rewarding shareholders with a dividend, which it stopped doing at the start of the pandemic year. The question has received more than 32K upvotes and the most “shares” of any question. In February 2020, AMC announced a dividend of USD 0.03 per share and hasn’t paid a dividend since then. That compared to a distribution of USD 0.20 per share in early 2019.

Source: AMC

Another popular question is whether a potential AMC/GameStop partnership could be in the works. This shareholder is looking for “theatre experiences via local and national gaming competitions.”

AMC and GameStop are two of the early meme stocks and have gained popularity among retail investors this year. Investors in both stocks have taken it on the chin in recent months as shares have been under pressure. AMC is down a steep 10% today ahead of the company’s earnings call on Aug. 9.

Something else that is on the minds of AMC investors is COVID, especially given the emergence of the delta variant. One investor suggests that the company consider going back in time to offering drive-in movie theaters, and at the very least they want to know how AMC would respond to another lockdown.

Debt Load

AMC is saddled with a heavy debt load on its balance sheet. Investors want to know how the movie chain will slash its debt without selling new shares. The company recently attempted to raise capital by issuing 25 million new shares but reversed course on the heels of investor backlash.

As of the end of Q1, AMC’s long-term debt stood at USD 5.5 billion. The company has said it plans to pare down its debt with the cash that it has raised. But it won’t be by selling new shares, at least not before 2022.

Another company that is welcoming questions from shareholders is cryptocurrency exchange Coinbase, whose earnings call is planned for Aug. 10.

A Post-Covid Hangover – Should You Worry About Your Portfolio?

Amazon executives noted shifting consumer habits as the pandemic eases and people become more mobile. Amazon forecasted the next quarter’s sales at between $106 billion and $112 billion, compared to Wall Street expectations for right around $119 billion.

Amazon’s projections would still represent growth of +10% to +16%. Keep in mind, bears are also pointing to ongoing fears of supply chain hiccups, higher-trending inflation, and new coronavirus outbreaks. Earnings come at a busy pace again today with results from Caterpillar, Cerner, Chevron, CNH Industrial, Colgate Palmolive, Enbridge, Exxon Mobil, Johnson Control, and Procter & Gamble.

The worry on Wall Street is that this new normal rate of growth will be slower than many analysts and trading firms are forecasting coupled with higher inflation and or supply chain dislocations corporate profits could fall under some pressure or in this case be less than Wall Street is forecasting for the next few quarters. Bulls expect more consumer spending will shift from goods and pandemic-related services (delivery, video games, cloud/collaboration software) but are still betting on pent-up demand for things people missed out on during lockdowns, as well as goods and services that are currently in short supply.

Data to watch

Updated inflation data is also on tap with the ISM Manufacturing Index on Monday and the Services Index on Wednesday.

There will be plenty more earnings next week too, including Simon Properties and Zoom on Monday; Activision Blizzard, Alibaba, Amgen, Clorox, ConocoPhillips, Eli Lilly, Fidelity, Match Group, Monster Beverage, Occidental Petroleum, and Phillips 66 on Tuesday; Allstate, CVS, Etsy, General Motors, Kraft Heinz, Marathon Petroleum, MetLife, MGM Resorts, Rocket Companies, Roku, Trane, and Uber on Wednesday; Adidas, AMC, Carvana, Cigna, Cloudflare, Corteva, Duke Energy, Kellogg, Moderna, Nintendo, Novo Nordisk, Siemens, Square, Wayfair, Zillow, and Zoetis on Thursday; and Dish Network, Dominion Energy, and DraftKings on Friday.

Insider Accumulation

ES ##-## (Daily) 2021_08_01 (19_25_02)

I have mixed feelings about SP500. There are a few signs of weakness. However, it might be the result of low summer activity. Advance-Decline Line is clearly bearish. Insider Accumulation is also not that strong. Moreover, the Volatility Index is very low and potentially it could bring a pullback. In any case, SP500 futures failed to close the week above Gann resistance. And that is also a negative sign.

The Federal Reserve policy is still supportive. But keep in mind, that SP500 has rallied around 100% since the pandemic bottom without any pullback. And the retest of key support zones near 4200 and 4000 is realistic.

On the other hand, the continuation of the rally is also possible but only if price sustains above 4400. If that happens, bulls will target 4500 and 4600 in extension.

AMC Chief Gives Individual Investors Louder Voice, Addresses Share Count

AMC Entertainment held its shareholder meeting on July 29 at a time when the company’s future hangs in the balance. Investors had all but written off the stock during the pandemic-fueled lockdowns, but the company experienced a 180-degree turn in 2021. With the tailwind of retail investors at its back and a digital strategy beginning to unfold, AMC is making moves to make its shareholders feel even more invested in the future direction of the company.

AMC CEO Adam Aron, who is active on social media, took to Twitter to thank shareholders who voted on issues at the latest meeting in Kansas City. Aron reminded his followers that the company reversed its recent decision to issue more shares after receiving backlash from investors, saying,

“You were not ready for this. And we listened to you.”

Debunking FUD

Aron also addressed what he described as “so much FUD going on around on the internet.” He was seemingly referring to accusations that the company was not being transparent about the meeting, but the chief executive put the kibosh on those rumors.

Aron took things a step further when he revealed that individual shareholders would be invited to ask questions on future earnings webcasts, a benefit typically reserved for Wall Street analysts. He also tipped his hand to a possible future direction of the company, saying that AMC will engage with U.S. professional sports leagues about potentially securing theatrical rights for the following:

  • College football
  • Premiere League
  • FIFA World Cup
  • UFC
  • Boxing

Aron admitted, however, that this is a “difficult and possibly prohibitively expensive” process.

Share Count

On the Twitter thread, followers debated the transparency of AMC’s share count, which Aron addressed head-on. He revealed that the “all-inclusive share count total” was 513,330,240 of “legally issued shares” as of June. The company has not issued any new shares since that time. On naked short-selling as well as options trading, Aron basically pleads the Fifth.

Source: Twitter

Buying the Dip

AMC’s stock price has been on a wild ride for the month of July, starting above the USD 50 level and ending below USD 40. Many retail investors are holding out for the next big short squeeze in hopes of cashing in on their bets.

Investors are encouraging one another on social media to dig in their heels and buy the dip.

Robinhood Markets Snubbed by Investors on Nasdaq Debut

Commission-free trading app Robinhood is officially a publicly traded company, but investors did not roll out the welcome mat for the stock. Shares of Robinhood, which trade under the symbol “HOOD,” opened at USD 38 per share on the Nasdaq before falling to around USD 33. The new stock managed to recover some of those losses and is down 5% at the last check, which is better than the close to 10% declines it suffered earlier in the session.

Source: TradingView

Isn’t It Ironic?

There has been a great deal of hype surrounding the Robinhood app, for several reasons, chief among which was its decision to earmark shares for its users. Robinhood pledged more than one-third of its float for customers of the trading app, which is on the generous side. A typical IPO will reserve less than 10% for retail investors as hedge funds and other big investors tend to get first dibs.

Individual investors have seemingly not returned the favor to Robinhood, leaving the mobile trading app hanging on its stock market debut. It could have gone either way. Robinhood was hoping to mend the fences between itself and jilted retail investors who were left holding the bag after the broker placed trading restrictions on popular meme stocks, including GameStop and AMC Entertainment.

The massive buying in GME And AMC by the Reddit WallStreetBets crowd in early 2021 pressured short-sellers, mainly hedge funds, and Robinhood caved to the pressure. The broker has since lifted those trading restrictions. Apparently, all is not well that ends well, however, if Robinhood’s stock price on day one is any indication. Social media members couldn’t resist the irony of the situation.

Celebrity Backers

Robinhood is kicking off its future as a public company with a market cap of USD 34 billion. A couple of astute backers who timed it right are Nas and Snoop Dogg, who invested in the trading app in 2014 when the company had a value of USD 62 million attached.

NBA champion Kevin Durant and his manager Rich Kleiman are probably not complaining either. They placed a bet four years ago through Thirty Five Ventures, the VC firm Drant and Kleiman co-founded.

Their return on Robinhood is reportedly in the ballpark of 2,500%.

Dogecoin Community Looks to Get on AMC’s Radar

Dogecoin, the seventh-biggest cryptocurrency, and AMC Entertainment have something in common. They have both attained meme status in their respective spheres. Now some Dogecoin fans would like to see those two worlds collide.

It appears to have started with YouTuber Steven Steele, who discusses many cryptocurrency-related topics on his channel. Steele, who has more than 10K followers on Twitter, suggested that AMC should start accepting Dogecoin as a payment method.

With all of the focus on bitcoin and Amazon, Steele has seemingly sought to shift the narrative in another direction. It is all speculation at this point, but Steele’s suggestion seems to be resonating with Doge fans. Dogecoin bull Elon Musk himself appears to have “liked” Steele’s tweet.

Source: Twitter

Mostly Cheers

The suggestion seemed to draw mostly cheers on social media, with Steele’s followers suggesting that it would send the Doge price to the moon. Dogecoin continues to hold onto the USD 0.20 level, for now, but it has shed 3% in the last 24-hour period.

Twitter Account “It’s All Risky,” which is described as “a former bitcoin maximalist who took the Doge pill,” agreed with Steele’s AMC idea. The “It’s All Risky” account even tagged AMC CEO Adam Aron, who has been known to engage with his followers on social media, in the thread.

“It’s All Risky” suggested that if AMC jumped on the Dogecoin bandwagon, Aron would be in good company — alongside Doge fan Elon Musk. While Tesla owns some bitcoin, the EV maker has yet to add support for Dogecoin as a payment method.

Both meme assets — Dogecoin and AMC — have seen better days. The Dogecoin price has basically been slashed in half since early June, while AMC is trading below USD 40 after trading above USD 70 last month.

Burger King Brazil

Dogecoin has already caught the eye of other companies. Men’s consumer brand Axe, for instance, launched a limited edition of the “Dogecan,” which is a physical product that the company distributed for free.

Not to be outdone, Burger King Brazil has just introduced the Dogpper, which seems to be a play on the Whopper and which consumers can pay for using Dogecoin. Burger King Brazil has launched an online process in which Doge holders can transfer their coins to the restaurant’s Dogecoin wallet.

When big companies recognize cryptocurrencies such as Dogecoin, it drums up excitement in the cryptocurrency community. Whether that positivity will make its way to crypto market prices, however, remains to be seen.

AMC Board Names CEO Adam Aron as Chairman

Aron has served as CEO, president and member of AMC’s board since 2016, having led the company to become the largest cinema operator in the world and maintain its liquidity when the pandemic hammered its business.

One of so-called ‘meme stocks’, AMC soared in a Reddit-driven retail short squeeze in the beginning of the year. The company’s shares were down 2.8% in premarket trading on Wednesday.

Last month, Microsoft made a similar move, naming CEO Satya Nadella as chairman of its board.

Many large firms have a legacy structure where the CEO and chairperson roles are held by a single person, usually the founder, but only in rare instances do corporations choose to go back to such a structure.

According to data from shareholder advisory firm Institutional Shareholder Services Inc (ISS) ESG, 59% of S&P companies have a separate chairman and CEO as of 2021, compared with 37% just ten years ago.

AMC said Ambassador Philip Lader will serve as lead director of the company.

(Reporting by Eva Mathews in Bengaluru; Editing by Maju Samuel)

Today’s Market Wrap Up and a Glimpse Into Tuesday

Today was not a pretty day in the markets after investors fled equities on rising fears of the COVID-19 Delta variant and the damage it could do to the economy. The Dow Jones Industrial Average shed 721 points, or more than 2%, for losses it hasn’t experienced since last October despite being off its lows of the session. Boeing was one of the hardest-hit stocks on worries of another lockdown, falling almost 5%.

The S&P 500 tumbled close to 2% while the Nasdaq was down just over 1%. Stocks weren’t the only asset class that suffered. Brent crude was down close to 7% to below the USD 70 threshold. Oil was set up for declines after OPEC and its allies reached an agreement over the weekend to bolster supply in an attempt to ease prices.

There was almost nowhere for investors to hide, except for bonds. Gold and bitcoin were even down on the day. Meanwhile, the yield on the 10-year Treasury fell to multi-year lows at 1.17%.

Stocks to Watch

IBM is in focus after the closing bell. After getting caught up in the selling pressure during the regular session, the stock rebounded in extended-hours trading. IBM is up nearly 4% thanks to a better-than-expected quarterly report in which the company’s top and bottom lines surpassed Wall Street estimates. The company proved that the turnaround from the pandemic was not a fluke as services and software both outperformed.

Investors are also celebrating AMC Entertainment in the after-hours for some fundamental reasons. The company announced the reopening of two theatres in the Los Angeles district. AMC was able to successfully negotiate with real estate firm Caruso to open the doors on the theatres after they were temporarily shut due to the pandemic. AMC shares are up fractionally in the extended-hours session.

Apple shares dropped close to 4%. The stock was recently perched at a fresh all-time high of USD 150 and is now trading closer to USD 140. Incidentally, Montreal-based investment firm Hexavest slashed its positions in tech stocks Apple and Microsoft in favor of healthcare stocks Merck and Pfizer in early 2021.

Look Ahead

On the economic front, Housing Starts for the month of June will be released on Tuesday. Wells Fargo economists are expecting a slight increase vs. May levels amid uninterrupted demand and improved conditions for lumber.

Netflix reports its Q2 results on Tuesday. The stock managed to eke out gains on Monday amid bullish expectations on Wall Street. Halliburton reports its Q2 earnings results on Tuesday.

Stock Futures Tread Lightly Ahead of Monday’s Trading

Stocks ended last week on a sour note after the Dow Jones Industrial Average tumbled close to 300 points to slip further below the 35,000 threshold. The S&P 500 and tech-heavy Nasdaq also finished Friday in the red. For the week, all three major indices lost ground after advancing for three straight weeks.

Retail sales climbed a higher than expected 0.6% last month vs. May, but investors chose to see the glass half empty and turned their attention toward inflation once again. Consumers are beginning to feel the effects of rising prices on real estate, cars and durable goods, according to the University of Michigan’s consumer sentiment index, which fell to 80.8 in the first half of July from June’s 85.5.

Stock index futures were not showing any clear direction on Sunday evening. Dow Jones Industrial Average futures were unchanged, while S&P 500 and Nasdaq futures were slightly positive. Economists cited by The Wall Street Journal believe economic growth saw its best days in the second quarter and will begin to ease. Nonetheless, the economy will keep expanding in 2022, economists say.

Stocks to Watch

Meme stocks were a mixed bag on Friday. AMC Entertainment shed nearly 3% while GameStop hit a stride and gained slightly more than 1% after five consecutive days of declines. GameStop has a new competitor after streaming giant Netflix made a key hire to muscle its way into the video game fray.

In the oil patch, OPEC+ has decided to bolster production for the next couple of years amid strengthening demand in a post-COVID-19 economy. The barrels of oil will be added on an incremental basis until the end of next year. Oil prices including WTI and Brent crude have retreated approximately 5% as the likelihood of an agreement between OPEC and its allies increased.

Look Ahead

Existing home sales for June come out on Thursday at 10 a.m. ET. Wells Fargo economists predict that they climbed higher to 6.06 million units vs. 5.8 million units for May.

As the earnings parade rolls on, technology companies are the next in line. IBM is in the pipeline for Monday. Wall Street has high expectations given that Big Blue is up against numbers from last year’s pandemic-fueled economic slowdown.

In addition, investors will be watching to see the results out of the transportation sector, which tends to serve as a gauge of the economy. J.B. Hunt Transport Services will report earnings after the market closes.

Why AMC Stock Is Down By 11% Today

AMC Stock Gained Strong Downside Momentum Despite Successful Weekend

Shares of AMC Entertainment gained strong downside momentum after the stock managed to settle below the 50 EMA at $39.65.

There were no near-term negative catalysts for the move. In fact, AMC has recently reported that it had roughly 3.2 million customers globally from Thursday through Sunday. This was the busiest weekend since the beginning of the pandemic.

The release of the Black Widow boosted viewership but failed to support the company’s shares as the market began to focus on valuation. The stock, which traded near the $2 level before it become one of the favorite stocks on social media, needs constant inflow of new money from retail investors as its valuation remains detached from reality. In addition, recent data suggests that short interest is rising again, which may put more pressure on the stock.

What’s Next For AMC Stock?

Analysts expect that AMC will report a loss of $3.16 per share in 2021 and a loss of $0.81 per share in 2022. Analyst estimates for 2023 project that the company will not be able to return to profitability.

As the stock remains fundamentally overvalued despite the significant correction which took it from the $70 level to the $35 level, its near-term performance will depend on whether it is able to attract more retail investors.

I’d note that momentum is very important for “meme stocks” as many retail traders look ready to jump into the hot stock of the day in search of quick profits. Once the stock loses momentum, the market begins to pay more attention to the company’s fundamentals, which is bearish for “meme stocks” whose valuation depends on popularity rather than financial results.

In this light, the recent move below the 50 EMA is a worrisome development for AMC bulls. This move may attract more short sellers, and the stock should have a decent chance to gain additional downside momentum in the upcoming trading sessions.

For a look at all of today’s economic events, check out our economic calendar.

Wall Street Firm Doubles Down on AMC Warning

Loop Capital has come out swinging against AMC Entertainment, the meme stock that has defied all odds this year. According to CNBC, Loop analysts have doubled down on their AMC warning, reiterating a “sell” rating on the stock. The reason they cited was “too many screens,” even as the movie chain is in the midst of an expansion push in which it plans to grow its footprint.

AMC investors have heard it all before, and they maintain that they are not going anywhere. The stock price was meandering between positive and negative territory before the bears gained control and sent shares lower by about 3%.

Loop Captial reportedly has a USD 1 price target on AMC, while shares traded as high as USD 72 last month. Loop Capital’s Alan Gould has been arguing lately that the valuation just doesn’t add up in light of the company’s fundamentals, a dynamic he is hard-pressed to believe can hold up for the long term.

Bullish Activity

Despite Wall Street’s disbelief about AMC, investors are showing signs of staying bullish on the meme stock. Even today, analysis firm Roensch Capital revealed that of the 126,000 options contracts traded on AMC, more than one-third of them are bullish calls compared to 36% bearish puts.

AMC CEO Adam Aron recently reversed course on a plan to issue 25 million more shares, and the stock has taken investors on a roller-coaster ride since then. For the month of July so far, AMC has shaved close to 15% off its value. The sentiment on social media among retail investors is to hold on. They are theorizing that after holding on this long and watching as the price fell from its peak to below USD 40, why not hang in there and wait for the potentially bigger short squeeze?

Movie Bet

AMC is banking on consumers continuing to return to the box office this summer to bolster its sales. Otherwise, Loop Capital’s theory that the movie chain is carrying “too many screens” could be proven right.

This weekend, AMC is touting films such as “Black Widow” starring Scarlett Johansson and William Hurt as well as “The Forever Purge” featuring Ana de la Reguera, Will Patton and Josh Lucas. The company also announced the release date for the upcoming Chance the Rapper Magnificent Coloring World to its theatres on Aug. 13, the tickets for which go on sale next week.