What's Going On With AMC Stock?

AMC Entertainment Holdings Inc AMC shares are trading higher by roughly 2.6% to $9.61 Friday morning. The company on Friday announced that it will report its results for the third quarter ended September 30, after the market closes on Wednesday, November 8. The stock may be also be volatile following recent momentum in anticipation of the debut of the Taylor Swift Eras Tour concert film.

The concert film generated more than $100 million in global advance ticket sales. AMC's CEO Adam Aron said he anticipates continued high demand, mentioning that the majority of people purchase tickets for movies on the day before or on the day of their intended viewing.

AMC Down Nearly 70% In 2023

AMC's 2023 decline is primarily attributed to a strategic move made by the company in August, which involved implementing a 10-to-1 reverse stock split. Additionally, during the same period, the company's AMC Preferred Equity Units, previously traded as APE, were converted into common stock.

A reverse stock split, like the one executed by AMC, doesn't inherently alter the fundamental value of the company itself. Instead, it increases the per-share price while reducing the total number of outstanding shares.

While this may appear positive on the surface, it often raises concerns among investors for several reasons:

Historical Association: Reverse stock splits are commonly associated with financially distressed or struggling companies. AMC's decision to go through with this reverse split may remind investors of the company's past financial difficulties, leading to concerns about its long-term financial health and prospects.

Perceived Weakness: The higher per-share price resulting from the reverse split can sometimes be seen as an artificial inflation of the stock price. This perception could signal that the company was struggling and needed to boost its stock price to avoid potential delisting. Investors may interpret this as a sign of weakness.

See Also: AMC CEO Adam Aron Got Caught Up In Blackmail Attempt After Sending Sexually Explicit Photos

According to data from Benzinga Pro, AMC Entertainment has a 52-week high of $91.50 and a 52-week low of $7.05.