AMC Entertainment (NYSE:AMC) Cashes In on Meme Stock Mania…Again – TipRanks.com

The meme stock mania is back in full swing, and AMC Entertainment (NYSE:AMC), one of the original meme stocks, is making the most out of the rally. This week, the movie exhibitor completed an at-the-market (ATM) equity offering of 72.5 million shares at $3.45 per share. The move helped the company raise $250 million in new capital.

The Capital Raise

But this isn’t the first opportune share sale from AMC. Over the past four years, the financially troubled movie chain has carried out at least five equity offerings, netting millions of dollars in proceeds. In September, it had raised around $325.5 million by selling around 40 million shares.

The steady stream of capital raises has meant dilution for existing investors in AMC, but that has not deterred retail investor interest in the stock. And this is where the story gets interesting.

Comes Amid Another Meme Stock Rally

The recent return of “Roaring Kitty” (who has only posted a few memes implying renewed interest in the action so far) after a gap of nearly three years, and the potential for a short squeeze, are factors enough to ignite a frenzy in meme names such as AMC. According to FinViz, short interest in AMC currently stands at about 18.8%. Our data dive at TipRanks indicates that retail investors own around a 6.72% stake in AMC. The small float can mean wild gyrations in AMC’s share price (as has been the case in the past). Consequently, AMC shares have rallied by nearly 129% over the last five days and are up by over 20% in the premarket session today already.

But Caution Is Warranted

Despite the hype, AMC still remains a risky bet. The company has an unbroken string of annual losses despite rising revenues over the past four years. Last week, the company reported a decline in attendance in its theaters for the first quarter and warned of a weak second quarter owing to a lower number of film releases.

What Is the Price Prediction for AMC Stock?

Its not surprising then that analysts have assigned the stock a Moderate Sell consensus rating, alongside an average AMC price target of $4.68. This implies a more than 30% potential downside in the stock.

Read full Disclosure