Very good news for AMC Entertainment’s stock price

By:
on May 28, 2024
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  • AMC Entertainment's share price rose by over 6% in the pre-market session.
  • The stock may have some upside after GameStop’s stock soared.
  • Other meme companies like BlackBerry, Virgin Galactic, and Clover could benefit.

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AMC (NYSE: AMC) stock price will be in the spotlight when the market opens on Tuesday. It soared by over 6% to $5.16, over 117% from its lowest level this year.  This increase has pushed its market cap to over $1.4 billion.

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GameStop’s stock price has soared

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AMC Entertainment shares are in the spotlight this week as investors reacted to the performance of the Box Office industry. Recent data showed that box office sales had the worst Memorial Day weekend in decades. 

That performance is in line with what the company warned in its recent financial results. The company said that its total sales will be weaker in the second quarter, citing last year’s Hollywood strikes. 

Garfield fetched $31.1 million during the weekend while Furiosa brought in over $32 million. These numbers contrasted what happened in 2022 and 2023 when movies like Top Gun and Little Mermaid brought in hundreds of millions of dollars.

These are bad news although analysts expect that the industry will start to recover in the second half of the year.

The main good news for AMC Entertainment is that GameStop stock price has resumed surging. It has soared by over 3.7% on Friday and by more than 22% in the pre-market session. This surge happened after the company completed its $933 million ATM offering. 

The company announced this sale as its stock surged earlier this month. This raise will boost its total cash and short-term investments to about $2 billion. As I have written before, the company has one of the best balance sheets in the industry since it has no debt.

GameStop’s surge is good news for AMC and other meme stock companies like Virgin Galactic, Blackberry, and Clover Health Investments. As we saw earlier this month, AMC stock tends to do well when GME is doing well.

What next for the AMC stock price?

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AMC chart by TradingView

Regular readers know that I have been betting on AMC for a while as you can read here, here, and here. At the time, I pointed to the stock’s falling wedge pattern, which is one of the most popular bullish signs. This view was accurate as the stock soared to a high of $12 on May 14th, up by almost 400% from its lowest point in April. 

Therefore, there is a likelihood that the stock will bounce back on Monday as buyers target the key resistance at $7. However, in the longer term, the stock may resume the bearish trend as the meme stock momentum fades.

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