AMC stock stays afloat as markets shrug off concerns

Update: AMC stock added 0.043% on Monday, ending the day at $23.31 per share. Global equities closed in the green on the first trading day of the week, regardless of mounting concerns about the Russia-Ukraine conflict. In the US, the Nasdaq Composite was the best performer, adding 1.74%, helped by news that Elon Musk has taken a 9.2% stake in Twitter. The share soared, ending the day roughly 28% up, as Tesla's CEO has now become the largest shareholder of the social media company. The Dow Jones Industrial Average added 103 points, while the S&P 500 ended the day 0.73% higher.

Meanwhile, investors' attention remains on Ukraine-Russia developments. As announced, Moscow has moved troops away from Ukraine’s northern region. However, Kyiv reported the massive assassination of civilians and war crimes, which resulted in western nations announcing plans to add sanctions on the Kremlin. French President Emmanuel Macron called to add sanctions on Moscow, while Germany and France decided to expel Russian diplomats from their countries. The US is also preparing more sanctions against Putin & Co. Ukraine’s President Volodymyr Zelenskyy said that considering what Russia has done in the country, it's difficult to negotiate with them.

Previous update: AMC stock has shed 4.6% in its first hour of trading for the week. The cinema chain is changing hands at $22.22 at the time of writing. This is not a risk-off, macro-related sell-off. The Nasdaq Composite is up more than a percentage point. It seems that the March 15 to March 28 rally is continuing to give way. If AMC shares are down at the close, then this will be the fourth consecutive session of losses. It tends to be that way for AMC – either steady gains or steady sell-offs. Recent investment Hycroft Mining (HYMC) is down more than 7% to $2. If Hycroft loses its footing at $2, then it could collapse all the way back to support around $1.30. The overall market is a bit mixed on Monday as investors concern themselves with how possible new sanctions from the European Union would affect their investments. Over the weekend, reports emerged that a massacre of non-combatants took place in the Ukrainian town of Bucha, which is leading to calls for further boycotts of Russian gas and oil and other sanctions.

AMC stock finished out the week on a losing note as the stock continued to give up some of its recent gains. However, AMC was still up a pretty healthy 15% on the week, but it could have been so much more. AMC Entertainment shares began the week at just over $20 and spiked to $34.33 before closing out the week at $23.30. Wild swings are not uncommon in this name, and last week certainly proved that.

AMC Stock News

AMC Entertainment surprised many with its investment in Hycroft Mining (HYMC), a Nevada-based gold miner. This came out of left field, but the investment was small compared to the cash AMC currently holds. The investment probably helped HYMC stave off potential bankruptcy as it was then able to tap investors with a capital raise. Back in November HYMC had said it may struggle and needed cash as it laid off nearly half of its workforce, but AMC and CEO Adam Aron rode to the rescue.

Aron has now become emboldened to try for more distressed debt deals as he looks to diversify from the movie theatre business. Certainly, AMC and Aron can round up huge amounts of publicity for stock and generate follow-on investors, which is one of the hardest parts of raising cash in capital markets. According to Fox Business, Aron may look for shareholder approval to use up to $500 million of AMC's $1.8 billion cash hoard on five or six deals in the mold of the HYMC deal. 

Elon Musk buys stake in Twitter

AMC Stock Forecast

We had identified failing momentum across the meme stock space during the middle of last week. This was especially evident in AMC on Tuesday when AMC stock spiked up to $34 early in the session before falling sharply to close at $29. This also neatly brought AMC up to resistance from our trend line at $34 as well as the 200-day moving average. Hence, this was a strong level and failure to break above it was crucial. Now $21 looks like the key support level with some help from the 9-day moving average at $23.25 along the way.

AMC stock chart, daily