Is AMC Raising Capital For New Projects? How will prices react

It announced a $110 million capital raise.
New opportunities may lead to a boom.
Prices have fallen by nearly 4% in the past 24 hours.

AMC Entertainment Holdings, Inc. (NYSE: AMC) has announced a raise of $110 million of new equity capital via the sale of AMC Preferred Equity (APE) in two phases at a weighted average price of $0.660 per share. It also includes a $100 million Debt for Equity Exchange and a proposed vote to convert APE units into AMC Common Shares and execute a reverse stock split.

AMC’s Board of Directors (BOD) is seeking a special meeting for the holders of both AMC common shares and APE to vote on the proposals. These proposals were made to increase the authorized AMC common share regarding the conversion from APE to AMC common share; the reversal of the split of AMC common share at the 1:10 ratio; and make necessary adjustments in the authorized ordinary share capital.

AMC is the largest theatrical exhibition company in the world. The major threat to cinematic exhibition companies is from OTT platforms that are trending among users. The OTT industry saw a boom and new entrants during the pandemic when people opted for these platforms for entertainment.

OTT platforms provide users with original and leased content, the facility to surf as per their whim and many more features that attract people. Companies like Netflix Inc. (NASDAQ: NFLX) have overshadowed theater companies with their screening capabilities and appeal to many.

The rivalry can be transformed into opportunities. According to reports, the streaming giant Netflix may screen its content in theaters. Alliance with companies like this can bloom the theater industry manifold.

Netflix released the sequel “Glass Onion: A Knives Out Story,” to the 2019 hit “Knives Out,” in selected theaters for a week before offering it to subscribers. Many believe similar streaming may happen in the future, and both the streaming and theater companies will hit the bull’s eye.

Further, AMC is likely to become more lucrative after the release of movies like Ant-Man and the Wasp: Quantumania and Oppenheimer in 2023, as these are among the most awaited movies and theaters are expected to flood with movie fanatics.

The price tale

The AMC price formed a falling parallel channel with the latest price level entering a consolidation phase. The price tried to turn bullish (green circle) near the release of the Avatar sequel but faced sellers who hindered the rise. 20-day Exponential Moving Average (EMA) floats above the current trading price of $3.85. If the price cracks the breakout level of $7.65, a rally may be established, reaching $13.77.

The Moving Average Convergence Divergence (MACD) records withdrawing sellers as the lines converge and the bars descend. The RSI holds a spot at the edge of being oversold, reflecting the overwhelmed emotions of the sellers. A cumulative study suggests the prices may rise from this level, taking support at $3.75 to set a high run in AMC prices.

Conclusion

The AMC price shows prospects of a rise in the near term. Future opportunities hold higher value as many expect new collaborations in 2023. Investors must look out for the breakout level of $7.65. Support zone of $3.75 can be trusted to enter the AMC market.

Technical levels

Support levels: $3.75 and $2.46

Resistance levels: $8.47 and $10.36

Disclaimer

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

Andrew is a blockchain developer who developed his interest in cryptocurrencies while his post-graduation. He is a keen observer of details and shares his passion for writing along with being a developer. His backend knowledge about blockchain helps him give a unique perspective to his writing