AMC Stock price: AMC eroded 22% Q4 gains, CEO Warns to sell APE

AMC stock price down by 8% on a weekly basis and lost 22% gains generated after the release of quarterly earnings. On 2 March 2023, during company quarter 4 earnings call AMC Entertainment Holdings (NYSE: AMC ) CEO Adam Aron requested shareholders to vote yes on an initiative that would increase the AMC authorized common shares and convert AMC preferred equity (APE) into common shares.

This would eliminate a price gap between AMC stock and APE units which will allow AMC to sell common shares instead of APE units. The CEO warns shareholders that if the vote falls short and APE units continue to trade at a discount then the firm could be forced to sell more APE. 

On the other hand, AMC shareholders seem to be hesitating to vote yes because it might negatively affect the AMC stock prices in the long term.

AMC stock – Quarterly update

Recently, AMC released the Q4 results in which the company reported EPS -$0.14 vs estimated -$0.21 and reported revenue of $1.03 billion vs estimated $977.65. 

The quarterly earnings were surprising as the company succeeded to beat the market estimates and analysts are also expecting revenue to increase in the coming quarters.

Will AMC stock price rise again?

AMC stock price is up by 53% on a YTD basis and shown a meaningful recovery from the 52 week low at $3.77 which shows that some fundamental shift is predicted correctly by its long term investors.

In the mid of January, AMC stock took U- turn from the yearly lows and managed to push the prices above the 50 day EMA which has created a hope for the bullish trend reversal and prices almost doubled in the short period of time. 

Later, AMC stock bulls also attempted to break out of the 200 day EMA but unfortunately, overall market sentiment turned negative and prices again took the downward direction. Therefore, $8.50 will act as an immediate hurdle level for the bulls followed by the next hurdle at $9.23 level.

AMC stock technical indicators like MACD are on the way to generate a negative crossover indicating price might trade with mild bearishness for some more time. The RSI at 50 denotes the balance between bullish and bearish positions. However, if the situation gets worse and prices continue the downside then $5.00 might turn out to be an important support level to watch.

Conclusion 

AMC stock prices failed to hold the higher levels and lost all the gains generated in Q4 earnings. Moreover, the market also reacted negatively to the CEO message and all of these issues are again disturbing the sentiment of its long term investors. However, AMC stock is near to the demand zone and expected to witness some short term pull back from the support level mentioned below.

Technical levels

Resistance levels : $9.23 and $10.75

Support levels : $5.00 and $3.78

Disclaimer

The views and opinions stated by the author, or any people named in this article, are for informational purposes only, and they do not establish financial, investment, or other advice. Investing in or trading crypto assets comes with a risk of financial loss.

Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own banks and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning.

Latest posts by Nancy J. Allen (see all)