Thursday, December 5, proved an unexpectedly good day for the main meme stock, with both GameStop (NYSE: GME) and AMC Entertainment Holdings (NYSE: AMC) rallying approximately 5% on a somewhat cryptic tweet by Keith Gill – the Roaring Kitty of the 2021 short squeeze fame.
By December 6, the situation changed drastically for AMC stock as the company executed something multiple commentators described as a typical move.
Specifically, the entertainment giant revealed it intends to offer 50 million shares through Goldman Sachs (NYSE: GS).
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Investors seemingly swiftly reacted to such dilution, and AMC plunged 8.27% in the Friday pre-market, from the latest closing price of $5.20 to $4.78.
Despite the extended-session downtrend, AMC has been doing relatively well and is up 13.54% in the last 30 days. Furthermore, even once the pre-market plunge is accounted for, the shares remain 4.37% in the green within the time frame.
AMC stock price analysis
Still, zooming out further simultaneously reveals AMC leadership’s inability to provide a true upside for the entertainment giant’s shareholders and indicates the rally in the last money was driven by the broad and strong stock market headwinds generated by Donald Trump’s re-election.
Indeed, in the last 6 months – and without accounting for the Friday pre-market – AMC is down 10.19% and, year-to-date (YTD), it has plunged 14.89%. The 2024 losses will deepen to 21.77% unless early trading on December 6 leads to a sudden rally.
What is next for AMC shares
While the Thursday upswing arguably did come as a surprise, traders who have been following Wall Street experts’ analysis of AMC stock are unlikely to have been caught off guard by the subsequent drop.
The three most recent revisions have all been moderately bearish. On November 7, both Benchmark and B. Riley reaffirmed they rate AMC shares as a ‘hold,’ and on November 13, Macquarie opined it will ‘underperform’ – in other words, that is a ‘sell.’
Perhaps more damning, while Macquarie held its price target steady, it also kept it at $4 – a 16.32% downside from the press time prices. Furthermore, though B. Riley’s forecast appears comparatively optimistic at $6, it was a downgrade from the previous estimate of $8.
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