What’s going on with AMC stock
The stock market’s decline has barely had time to abate as AMC stock continues to fall. The firm’s shares had lost another 6.9% at 11:39 a.m. ET on Thursday, after only just regaining ground following their stunning plunge previously.
There’s no particular news to explain the stock’s losses. AMC has lost 57% of its value since peaking at $34.33 at the end of March. Moreover, it has lost 80% of its value from its meme stock bubble high of over $72 a share.
Why we care
AMC Entertainment Holdings (NYSE:AMC) stock is aggressively shorted, with over a quarter of its shares sold short, and other than the self-described “apes” hoping for a short squeeze, there’s little to suggest that the theater owner’s stock will rise any time soon.
Theater attendance has remained low, and the economy is getting worse. The GDP decreased 1.4% in the first quarter of this year, compared to the predicted 1% increase. In addition, domestic box office receipts are down 54% from where they were two years ago.
AMC was supposed to have a good year in 2022. The company has a strong slate of new features, including The Batman, Top Gun: Maverick, Jurassic World Dominion, Black Panther: Wakanda Forever, and Avatar 2. While big-budget movies remain the king of the box office. Only a fraction of superhero and action titles draw audiences and release windows for theatrical releases before online streaming feeds are shrinking. Furthermore, we’re spending far more time at home watching television than two years ago.
Inflation is rampant, and real disposable income dropped 2% in the first three months of 2022, so people are looking for a way to get away. Personal savings have also decreased. There’s less money available to spend, and everything costs more, making going to the cinema an expensive pleasure these days.
AMC Entertainment is already in the midst of a difficult recovery. However, things become much more difficult with an economy caught in a vise grip of inflation. As a result, AMC stock continues to fall and has no hope of attaining previous heights.