National CineMedia (NASDAQ:NCMI) stock is taking off on Tuesday following news of AMC Entertainment (NYSE:AMC) taking a stake in the movie theater business.
According to a filing with the U.S. Securities Exchange Commission (SEC), AMC has acquired a passive stake in NCMI stock. This saw it acquiring 16.58 million units through its American Multi-Cinema subsidiary.
The shares acquired by American Multi-Cinema are convertible on a one-for-one basis into shares of NCMI stock. That means that AMC Entertainment has a 9.1% stake in the company but isn’t able to vote unless it converts the shares to common stock.
Why Invest in NCMI Stock?
AMC Entertainment investing in National CineMedia makes sense as they both are part of the movie theater business. In AMC’s case, the company operates a chain of movie theaters. NCMI, however, operates an advertising business that’s responsible for the ads that run before movies start.
Today’s news has shares of NCMI stock seeing incredibly heading trading. As of this writing, more than 15 million shares of NCMI stock have changed hands. That’s already well above the company’s daily average trading volume of about 2.8 million shares.
NCMI stock is up 110.8% during pre-market trading on Tuesday. That erases much of the losses the stock has experienced since the start of the year.
Investors searching for more of the latest stock market news will want to keep reading!
We’ve got all of the hottest stock market coverage traders need to read about on Tuesday! That includes the biggest pre-market stock movers this morning, as well as the latest on Mullen Automotive (NASDAQ:MULN) and Nikola (NASDAQ:NKLA) stock. You can find out more on these matters at the links below!
More Tuesday Stock Market News
- Today’s Biggest Pre-Market Stock Movers: 10 Top Gainers and Losers on Tuesday
- MULN Stock: What Should Mullen Do With a $110 Million Windfall?
- NKLA Stock Price Prediction: Is Nikola Really Worth Just $1?
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On the date of publication, William White 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.
