AMC Stock: Adam Aron Backs Cash Raises as Regal Closes Theaters

  • AMC Entertainment (AMC) has been volatile lately, with shares recently rallying more than 70% from the December low, then pulling back 20%.
  • Following capital raise comments from CEO Adam Aron, AMC stock is back in focus on Friday.
  • Aron’s comments are raising speculation about whether the company will do another raise in the near future.
AMC movie theater front glowing in the setting sun with the name shining bright red. AMC stock.
Source: Ian Dewar Photography / Shutterstock

AMC Entertainment (NYSE:AMC) stock is on watch on Friday as shares remain somewhat volatile. AMC stock is up about only slightly on the day. However, shares rose more than 5% at one point in the session.

That’s nothing compared to the recent action, though.

At Wednesday’s high, AMC stock was up more than 70% from the December low just a few weeks ago. However, from Wednesday’s high to yesterday’s low, shares pulled back by nearly 20%.

AMC Entertainment has been all over the map lately. Recently, there was a wave of bullish momentum as stocks like AMC, GameStop (NYSE:GME) and Bed Bath & Beyond (NASDAQ:BBBY) caught a bid.

Part of that momentum came on hopes that GameStop Chairman Ryan Cohen could reignite demand for these stocks. For AMC stock specifically, though, hope also hinged on the new Avatar film increasing demand at movie theaters.

Recently, CEO Adam Aron tweeted about the film, bolstering enthusiasm. Aron said that the film “keeps on rolling” and that his predictions about its performance “were easily surpassed.”

Will Adam Aron Raise Capital for AMC Stock Next?

Aron didn’t just take to Twitter this week to talk about Avatar: The Way of Water, however. On Friday, he also addressed raising capital. The CEO tweeted a picture that read “The only mistake in life is the lesson not learned” and wrote the following:

“If you question why AMC keeps on raising so much cash: In tough times companies who don’t, just die. #2 chain Regal filed Chapter 11 bankruptcy because it ran out of cash. Of their 546 U.S. theatres, the bankruptcy judge was just told they now intend to walk away/close fully 108!”

These comments come as Regal — owned by Cineworld (OTCMKTS:CNNWQ) — closes more theaters and looks to cut down costs. The company filed for Chapter 11 bankruptcy back in September.

AMC stock recently hit 52-week lows in December amid a capital raise. Following Aron’s comments, that has some investors wondering if another capital raise may not be too far off. At the very least, they know management is open to raising more capital.

Whether an investor believes in AMC or not, they should keep tabs on the stock’s momentum. It’s much easier to be a buyer when the stock has the wind at its back and continues to trend higher. When it’s making new lows and stuck below multiple resistance areas, though, it’s harder for the buy-and-hold investors.

On the date of publication, Bret Kenwell did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell.


Article printed from InvestorPlace Media, https://investorplace.com/2023/01/amc-stock-adam-aron-backs-cash-raises-as-regal-closes-theaters/.

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