Pop some popcorn, sit back and wait for another day of big moves in AMC Entertainment (NYSE:AMC). After a weekend, gains in the r/WallStreetBets favorite are back, with AMC stock up another 9% on Monday morning. So where are those gains coming from? And what else do you need to know?
Importantly, it appears that investors have some meaningful reasons for rallying behind AMC Entertainment today. The first is that all signs continue to point to a reopening rally. Last week, President Joe Biden marked July 4 as a key date in the return to normal. AMC said that now, about 90% of its theaters are reopened. Big films are on the calendar for later this year. And consumers are starting to engage with pre-pandemic hobbies more frequently. The TSA screened nearly 1.4 million passengers on on Friday, marking a new high since March 15, 2020.
For investors then, the thinking is that AMC Entertainment will benefit from the return to normal. Consumers will want to get out of the house, and movie theaters will offer a chance to escape. Plus, as Hollywood gets back on track, there will be exciting new releases to draw in fans.
However, there is another reason AMC stock is on the move today.
The third round of stimulus checks is on its way to Americans, bringing qualifying individuals $1,400. While economists think stimulus checks (and the broader American Rescue Plan) can help jumpstart the economy, there is a specific connection for AMC. As Julia Horowitz wrote for CNN, there is a chance we could see as much as $170 billion hit the equity markets from these stimulus checks. Retail investors are diving into the stock market, and with $1,400 more to their names, they could further rally behind Reddit stocks like AMC and GameStop (NYSE:GME).
What Else to Know About AMC Stock Today
To start, investors should know there is another angle to the stimulus checks news. Not only could the direct payments boost stock market participation, they could help boost the underlying AMC business. As Parkev Tatevosian wrote for The Motley Fool today, many consumers may use their stimulus checks to splurge on movie tickets or a bucket of popcorn. Especially with the reopening narrative strengthening, stimulus checks could help bring about a return to normal for movie theaters.
Lastly, investors should know that one big AMC stock shareholder is shaking things up. Dalian Wanda Group, a Chinese firm, held a 37.7% majority stake in AMC as of October 2020. According to the latest filings from March, Dalian Wanda cut that stake to just 9.8%. This comes as AMC struggled in 2020, and as Dalian Wanda cuts back its international reach. To AMC CEO Adam Aron, this is just another chance for a wider variety of shareholders to govern the company.
Keep an eye on AMC stock and its peers. With a third round of stimulus checks on their way, Reddit stocks could see another buying boost.
On the date of publication, Sarah Smith did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Sarah Smith is a Web Content Producer with InvestorPlace.com.
