The movie theater company AMC has been hit hard because of the pandemic for over a year now. The company is bleeding cash because people are not going out to watch movies and AMC still has to pay the rent. AMC has 620 theaters in the United States and 358 theaters in Europe. Also, AMC majority shareholder is Wanda Group out of China. Although, the company, over all is not doing well, it’s stock price is higher than normal because of its meme stock status.
AMC’s meme status has had garnered a lot publicity since the beginning of the year. A hashtag on Twitter began to trend and raised the stock price higher. In the last 52 weeks, AMC has had some extreme volatility for a company that is almost in bankruptcy. The lowest price was $1.91 and as high of $20.36! AMC used these swings to pay off some it’s debt in the tune of 1.2 billion, but it is still roughly 5.7 billion in debt.
I jumped on the AMCs bandwagon at the downswing of it’s epic rise and ended up being a bag holder. It was a valid lesson for me because emotional stock trading always ends in a loss. It’s like the old saying goes, “Bulls make money, Bears make money, but the pigs get slaughtered.” My investment strategy was that I had none and I was trying to jump into something at the wrong time. Although, I did lose a bit in my first round with AMC, I actually reinvested in put options to try to regain some ground. It worked and I got some of my investment back. I guess, I did not learn my lesson quickly because I jumped back in with 15 put options contracts with a strike price of 10.50. The stock price went stagnant on me and the price have been hovering in that range all week. Stay Tuned!
Is AMC going to come back? What are you thoughts? Drop a line in the comments!