$APE - Can It Help $AMC Rebound?
Despite being considered to be the world’s largest theater chain, AMC Entertainment Holdings, Inc. (NYSE: AMC) finds itself trading in penny stock territory as it continues working to navigate through the pandemic’s impacts on the industry. While the stock has caught investors’ attention in 2021 thanks to its massive short squeeze, AMC stock has been dropping to new 52-week lows over the past week. This drop comes at a time where many investors are bullish on AMC stock forecast in the future since the company has been actively working to reduce its mounting long-term debt. One of these efforts is AMC’s launch of APE stock as a way to help raise capital to pay off some of its debt.
Although APE stock appears to have been a major help to the company’s efforts, AMC’s plan to convert APE units into AMC shares has sent the stock plummeting nearly 30% since the announcement. Despite this, AMC stock forecast appears to be bright if this proposal is approved as it could allow the company to raise capital more efficiently. While the company is yet to share a date for its shareholders meeting, many investors are watching closely for more news as AMC stock could be set to rebound if the company’s plan proves to be successful.
AMC Fundamentals
Movie Industry Rebounding
While the movie industry has been looking to climb back from its pandemic losses in 2022, the industry has failed to recapture its previous success due to several reasons. One reason is the meteoric rise of streaming services that significantly impacted movie theaters as many people prefer watching movies at the comfort of their homes. Additionally, the decline in theatrical releases has impacted movie theaters’ ability to generate revenues. As the movie theater is witnessing these negative conditions, the industry generated $7.3 billion in domestic ticket sales – representing a 30% decline from its 2019 levels. Based on this, AMC stock plunged more than 75% YTD as the industry looks to weather this storm – leading many investors to ask the question “will AMC stock rebound in 2023?”.
To answer this question, investors should note that AMC stock is mainly dependent on movie releases in 2023 for a rebound from its lows. Although 2022 witnessed successful releases like Top Gun Maverick, Jurassic World Dominion, and Avatar: The Way of Water which all broke the $1 billion mark in global ticket sales, these releases were not able to get the industry back to pre-pandemic numbers. This is mainly due to the low number of movie releases in 2022 compared to 2019. Meanwhile, 2023 is expected to witness more releases on a more consistent basis which could inch the movie theater industry closer to pre-pandemic numbers.
With this in mind, analysts believe that the mid-range movies – performing in the $50 to $150 million range could be pivotal to the industry’s rebound than blockbusters`. Since consistent releases of this movie range could allow movie theaters to receive a boost to their revenues in 2023, AMC stock forecast appears to be bright for 2023 and beyond.
Looking to capitalize on this increase in movie releases, AMC acquired a 13-screen former Arclight Cinemas theater located in Boston. This theater was opened in December 2019 and closed three months later due to Covid. Since this theater is considered to remain brand new, AMC could be poised to reopen this theater soon – adding more revenues to the company. With this in mind, AMC expects to open this theater in Spring 2023 which could set the company to realize additional revenues thanks to the expected influx of movie releases in 2023.
APE Stock & Reducing Debt
Despite the company’s efforts to return to pre-pandemic profitability, AMC stock has been affected by the company’s mounting debt situation which has led the company to dilute its shares significantly to raise capital. With the company looking to reduce this dilution, AMC launched its own AMC Preferred Equity (NYSE: APE) to strengthen its balance sheet and pay down its debt. At the same time, APE stock was expected to allow AMC to pursue investment opportunities similar to investment in Hycroft Mining Holding Corporation (NASDAQ: HYMC). In this way, AMC would be able to survive in the near-term as it works to move on from the pandemic’s impacts.
By utilizing APE stock, AMC was able to raise $162.4 million through the sale of 125.9 million APE shares in an at-the-market offering. This allowed AMC to repurchase $30.7 million principal amount of its 10% second lien debt due 2026 at a 60% discount and $5.2 million principal amount of its 6.125% Senior Subordinated Notes due 2027 at a 70% discount. In this way, AMC was able to reduce the principal amounts of its debt by $180 million in 2022. As a result, AMC stock forecast appears to be bright for 2023 as it could further reduce its mounting debt with expectation that the movie theater industry could further grow in 2023.
In addition to the capital raised from APE’s ATM offering, AMC announced it will raise $110 million through the sale of APE stock to Antara Capital, LP. According to this deal, Antara will also exchange $100 million principal amount of second lien notes due 2026 in exchange for 91 million APE shares – reducing AMC’s debt by a further $100 million as well as interest expenses by $10 million. For this reason, many investors are increasingly bullish on AMC stock forecast for 2023.
Since the sale of these shares is set to take place in two tranches, the first tranche includes the immediate purchase of 60 million APE shares under its ATM offering. Meanwhile, the second tranche includes the purchase of 106.6 million shares of APE in addition to the $100 million share exchange which is subject to the completion of the waiting period under Hart-Scott-Rodino of nearly 30 days. Once this deal is finalized, AMC stock forecast could be the brightest it has ever been since the pandemic as the company appears to be on the right track to provide long-term value to its shareholders.
Although APE stock has been achieving its intended purpose, AMC intends to hold a special meeting for AMC stock and APE stock shareholders to vote on the conversion of APE shares into AMC shares. This conversion also includes increasing AMC’s authorized shares to accommodate for this conversion while effecting a 1-to-10 reverse split. AMC believes this conversion could be better for the company’s future prospects since APE stock has been trading at a major discount compared to AMC stock.
By eliminating APE stock’s discount, AMC could be better positioned to raise capital in the future at a lower dilution risk than the current APE stock price. In light of this, many investors are anticipating an announcement regarding the meeting’s date to vote in favor of the company’s proposals as it could set the company for financial growth in the future. For this reason, AMC stock forecast appears to be bullish for 2023 as the stock has the potential to rebound off of its recent lows.
AMC Financials
Looking into AMC’s Q3 report, the company reported a YOY increase in revenues to $968.4 million compared to $763.2 million which could be attributed to the growth in moviegoers in 2022 thanks to the easing of Covid restrictions. However, these increased operations led AMC’s operating costs to increase from $908.4 million a year ago to $1 billion in Q3. In this way, AMC reported a net loss of $226.9 million – taking its total net loss YTD to $685.9 million which is a significant improvement from $1.1 billion over the same period in 2021. Considering that more movie releases are expected for 2023, AMC could be well-positioned to report better financials this year.
As for its balance sheet, AMC’s assets declined from $10.8 billion at the beginning of 2022 to $9.2 billion in Q3. This decline is mainly due to the company’s cash balance decreasing from $1.5 billion to $684.6 million. Meanwhile, AMC has been able to reduce its liabilities as it reported $11.7 billion compared to $12.6 billion at the beginning of 2022. With this in mind, the company was able to achieve this by reducing its debt from $5.4 billion to $5.1 billion while also reducing its lease liabilities to $4.2 billion from $4.6 billion. Given that the company was able to further reduce its debt in Q4, investors are anticipating a positive annual report which could send AMC stock on a major run.
Technical Analysis
APE stock price is currently at $1.41 and has supports near 1.24, .89, and .66. Meanwhile, APE shows resistances near 1.52 and 2.07. Since the company shared its proposal to combine AMC and APE shares, APE stock climbed more than 200% since it could be poised for a boost in value if the company’s proposals pass considering its discount from AMC stock price. While APE has cooled off from its recent run, the stock could be set to climb again soon as it could be attractive for investors since it would have the same value of AMC stock.
With this in mind, investors could watch for a break through the 50 MA before entering a position. If APE breaks through the 50 MA resistance, a good entry could be on retests of the MA. However, in case the stock fails to break through the MA resistance, APE stock could drop to fill the gaps near $1.28 and $.66 which could present attractive entries into APE in anticipation of the special meeting.
Following APE’s parabolic run past $2, accumulation has been trending downwards which could be attributed to investors taking profits. Similarly, the MACD is bearish, however, it could be poised to crossover soon if enough volume is present. The RSI is holding at 44 which could signal a run for APE stock in the short-term in anticipation of the special meeting.
AMC Forecast
With the company working to improve its debt situation, AMC stock forecast in 2023 appears to be bright. Although the company was able to reduce its debt by nearly $280 million in 2022, investors are increasingly bullish AMC could further reduce its debt as the movie industry continues to recover from the pandemic’s impacts. On that note, the movie industry appears to be on the right track to reach its pre-pandemic levels as it reached $7.3 billion in domestic ticket sales in 2022. While movie releases in 2022 were much lower than 2019, the industry was able to reach these revenues thanks to the successful releases of Top Gun Maverick, Jurassic World Dominion, and Avatar: The Way of Water. Given that more releases are expected for 2023, many investors are bullish AMC stock could be on track to rebound in 2023.
Meanwhile, investors are watching closely for updates regarding the special meeting to vote on combining AMC and APE shares. Considering the steep discount APE stock is trading at compared to AMC stock, this move could allow the company to raise capital more efficiently in the future – reducing the impacts of such dilution on shareholders. As many investors are bullish on the company’s proposals, AMC stock could be set to rebound in 2023 as it continues to reduce its debt. Despite this, AMC stock could continue trading near its lows as APE stock could be a more rewarding investment in case the proposals pass the vote as it could receive a major boost in its PPS.
Although APE stock appears to have been a major help to the company’s efforts, AMC’s plan to convert APE units into AMC shares has sent the stock plummeting nearly 30% since the announcement. Despite this, AMC stock forecast appears to be bright if this proposal is approved as it could allow the company to raise capital more efficiently. While the company is yet to share a date for its shareholders meeting, many investors are watching closely for more news as AMC stock could be set to rebound if the company’s plan proves to be successful.
AMC Fundamentals
Movie Industry Rebounding
While the movie industry has been looking to climb back from its pandemic losses in 2022, the industry has failed to recapture its previous success due to several reasons. One reason is the meteoric rise of streaming services that significantly impacted movie theaters as many people prefer watching movies at the comfort of their homes. Additionally, the decline in theatrical releases has impacted movie theaters’ ability to generate revenues. As the movie theater is witnessing these negative conditions, the industry generated $7.3 billion in domestic ticket sales – representing a 30% decline from its 2019 levels. Based on this, AMC stock plunged more than 75% YTD as the industry looks to weather this storm – leading many investors to ask the question “will AMC stock rebound in 2023?”.
To answer this question, investors should note that AMC stock is mainly dependent on movie releases in 2023 for a rebound from its lows. Although 2022 witnessed successful releases like Top Gun Maverick, Jurassic World Dominion, and Avatar: The Way of Water which all broke the $1 billion mark in global ticket sales, these releases were not able to get the industry back to pre-pandemic numbers. This is mainly due to the low number of movie releases in 2022 compared to 2019. Meanwhile, 2023 is expected to witness more releases on a more consistent basis which could inch the movie theater industry closer to pre-pandemic numbers.
With this in mind, analysts believe that the mid-range movies – performing in the $50 to $150 million range could be pivotal to the industry’s rebound than blockbusters`. Since consistent releases of this movie range could allow movie theaters to receive a boost to their revenues in 2023, AMC stock forecast appears to be bright for 2023 and beyond.
Looking to capitalize on this increase in movie releases, AMC acquired a 13-screen former Arclight Cinemas theater located in Boston. This theater was opened in December 2019 and closed three months later due to Covid. Since this theater is considered to remain brand new, AMC could be poised to reopen this theater soon – adding more revenues to the company. With this in mind, AMC expects to open this theater in Spring 2023 which could set the company to realize additional revenues thanks to the expected influx of movie releases in 2023.
APE Stock & Reducing Debt
Despite the company’s efforts to return to pre-pandemic profitability, AMC stock has been affected by the company’s mounting debt situation which has led the company to dilute its shares significantly to raise capital. With the company looking to reduce this dilution, AMC launched its own AMC Preferred Equity (NYSE: APE) to strengthen its balance sheet and pay down its debt. At the same time, APE stock was expected to allow AMC to pursue investment opportunities similar to investment in Hycroft Mining Holding Corporation (NASDAQ: HYMC). In this way, AMC would be able to survive in the near-term as it works to move on from the pandemic’s impacts.
By utilizing APE stock, AMC was able to raise $162.4 million through the sale of 125.9 million APE shares in an at-the-market offering. This allowed AMC to repurchase $30.7 million principal amount of its 10% second lien debt due 2026 at a 60% discount and $5.2 million principal amount of its 6.125% Senior Subordinated Notes due 2027 at a 70% discount. In this way, AMC was able to reduce the principal amounts of its debt by $180 million in 2022. As a result, AMC stock forecast appears to be bright for 2023 as it could further reduce its mounting debt with expectation that the movie theater industry could further grow in 2023.
In addition to the capital raised from APE’s ATM offering, AMC announced it will raise $110 million through the sale of APE stock to Antara Capital, LP. According to this deal, Antara will also exchange $100 million principal amount of second lien notes due 2026 in exchange for 91 million APE shares – reducing AMC’s debt by a further $100 million as well as interest expenses by $10 million. For this reason, many investors are increasingly bullish on AMC stock forecast for 2023.
Since the sale of these shares is set to take place in two tranches, the first tranche includes the immediate purchase of 60 million APE shares under its ATM offering. Meanwhile, the second tranche includes the purchase of 106.6 million shares of APE in addition to the $100 million share exchange which is subject to the completion of the waiting period under Hart-Scott-Rodino of nearly 30 days. Once this deal is finalized, AMC stock forecast could be the brightest it has ever been since the pandemic as the company appears to be on the right track to provide long-term value to its shareholders.
Although APE stock has been achieving its intended purpose, AMC intends to hold a special meeting for AMC stock and APE stock shareholders to vote on the conversion of APE shares into AMC shares. This conversion also includes increasing AMC’s authorized shares to accommodate for this conversion while effecting a 1-to-10 reverse split. AMC believes this conversion could be better for the company’s future prospects since APE stock has been trading at a major discount compared to AMC stock.
By eliminating APE stock’s discount, AMC could be better positioned to raise capital in the future at a lower dilution risk than the current APE stock price. In light of this, many investors are anticipating an announcement regarding the meeting’s date to vote in favor of the company’s proposals as it could set the company for financial growth in the future. For this reason, AMC stock forecast appears to be bullish for 2023 as the stock has the potential to rebound off of its recent lows.
AMC Financials
Looking into AMC’s Q3 report, the company reported a YOY increase in revenues to $968.4 million compared to $763.2 million which could be attributed to the growth in moviegoers in 2022 thanks to the easing of Covid restrictions. However, these increased operations led AMC’s operating costs to increase from $908.4 million a year ago to $1 billion in Q3. In this way, AMC reported a net loss of $226.9 million – taking its total net loss YTD to $685.9 million which is a significant improvement from $1.1 billion over the same period in 2021. Considering that more movie releases are expected for 2023, AMC could be well-positioned to report better financials this year.
As for its balance sheet, AMC’s assets declined from $10.8 billion at the beginning of 2022 to $9.2 billion in Q3. This decline is mainly due to the company’s cash balance decreasing from $1.5 billion to $684.6 million. Meanwhile, AMC has been able to reduce its liabilities as it reported $11.7 billion compared to $12.6 billion at the beginning of 2022. With this in mind, the company was able to achieve this by reducing its debt from $5.4 billion to $5.1 billion while also reducing its lease liabilities to $4.2 billion from $4.6 billion. Given that the company was able to further reduce its debt in Q4, investors are anticipating a positive annual report which could send AMC stock on a major run.
Technical Analysis
APE stock price is currently at $1.41 and has supports near 1.24, .89, and .66. Meanwhile, APE shows resistances near 1.52 and 2.07. Since the company shared its proposal to combine AMC and APE shares, APE stock climbed more than 200% since it could be poised for a boost in value if the company’s proposals pass considering its discount from AMC stock price. While APE has cooled off from its recent run, the stock could be set to climb again soon as it could be attractive for investors since it would have the same value of AMC stock.
With this in mind, investors could watch for a break through the 50 MA before entering a position. If APE breaks through the 50 MA resistance, a good entry could be on retests of the MA. However, in case the stock fails to break through the MA resistance, APE stock could drop to fill the gaps near $1.28 and $.66 which could present attractive entries into APE in anticipation of the special meeting.
Following APE’s parabolic run past $2, accumulation has been trending downwards which could be attributed to investors taking profits. Similarly, the MACD is bearish, however, it could be poised to crossover soon if enough volume is present. The RSI is holding at 44 which could signal a run for APE stock in the short-term in anticipation of the special meeting.
AMC Forecast
With the company working to improve its debt situation, AMC stock forecast in 2023 appears to be bright. Although the company was able to reduce its debt by nearly $280 million in 2022, investors are increasingly bullish AMC could further reduce its debt as the movie industry continues to recover from the pandemic’s impacts. On that note, the movie industry appears to be on the right track to reach its pre-pandemic levels as it reached $7.3 billion in domestic ticket sales in 2022. While movie releases in 2022 were much lower than 2019, the industry was able to reach these revenues thanks to the successful releases of Top Gun Maverick, Jurassic World Dominion, and Avatar: The Way of Water. Given that more releases are expected for 2023, many investors are bullish AMC stock could be on track to rebound in 2023.
Meanwhile, investors are watching closely for updates regarding the special meeting to vote on combining AMC and APE shares. Considering the steep discount APE stock is trading at compared to AMC stock, this move could allow the company to raise capital more efficiently in the future – reducing the impacts of such dilution on shareholders. As many investors are bullish on the company’s proposals, AMC stock could be set to rebound in 2023 as it continues to reduce its debt. Despite this, AMC stock could continue trading near its lows as APE stock could be a more rewarding investment in case the proposals pass the vote as it could receive a major boost in its PPS.
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