- NYSE: AMC gained 7.56% during Thursday’s trading session.
- AMC is using the APE preferred shares to disguise another capital raise.
- The SEC is looking into Melvin Capital for allegations of misleading investors.
NYSE: AMC rose higher for the second straight day as the movie theater chain continues to add to the recent rally that has seen it gain more than 30% over the past week. On Thursday, shares of AMC added a further 7.56% and closed the trading session at $25.46. Stocks were mixed during intraday trading and all three major indices closed the day more or less flat. Overall, the Dow Jones gained 27 basis points, the S&P 500 inched lower by 0.07%, and the NASDAQ dipped lower by 0.58% during the session.
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The major news from AMC’s recent earnings call was that the company is rewarding its shareholders with preferred shares trading under the new ticker symbol, APE. The preferred shares will be distributed on a 1 to 1 basis for existing shareholders as of the record date of August 15th. This is likely another explanation for the increased buying pressure for AMC’s stock. It is also a means for the company to raise capital. AMC heavily diluted its stock during the pandemic as it sold common shares to remain afloat. Raising capital isn’t necessarily a bad thing, especially if there is no further dilution of the stock. CEO Adam Aron has once again used retail investor exuberance to raise the stock’s price.
AMC stock forecast
In an interesting piece of news, hedge fund Melvin Capital is being investigated by the SEC for misleading investors during the meme stock squeeze. The firm recently announced it would be shutting down operations due to heavy losses from the AMC and GameStop (NYSE: GME) squeezes in 2021, but it looks like it might have to deal with the SEC before it permanently closes its doors.
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