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The AMC Stock Price Has Fallen 34.7% in 2022 but Could Have Bottomed. What’s Next?

Simon Mugo trader
Updated 15 Feb 2022

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Key points:

  • AMC stock has fallen 34.7% in 2022 but could have recently bottomed.
  • The stock could rally higher on the release of multiple blockbuster movies.
  • Jim Simons of Renaissance Technologies almost doubled his AMC stake.

The AMC Entertainment Holdings Inc (NYSE: AMC) stock price has fallen 34.7% in 2022 and appears to have bottomed, according to the daily chart shown at the bottom of this article.

Here’s what could be next for the cinema chain operator.

AMC just concluded the private offering of its senior secured notes worth $950 million, yielding an annual interest rate of 7.5%, due in 2029. AMC’s subsidiaries guarantee the notes on a senior secured basis as senior debt.

Also, Read Best Shares to Buy Now.

The proceeds of the latest capital raise went to fully redeem lien notes worth $500 million owed by the company, which were due in 2025 and were attracting a 10.5% annual interest.

AMC used $300 million of the funds raised to redeem first lien senior notes yielding 10.5% in annual interest due 2026, while $73.5 million was used to first-lien notes due 2026 that were attracting 15%/17% cash interest annually.

Investors were relieved with the announcement since AMC is now servicing just one senior loan compared to three separate loans attracting higher interest rates due much sooner than its current senior loan.

Adam Aron, AMC’s Chairman and CEO, said: “Today marks another important milestone in our ongoing recovery from the global pandemic, as we have completed a tremendously successful capital raising of $950 million that will be used to refinance high interest rate debt. With this transaction, we are taking a significant step forward by lowering interest expenses and extending debt maturities out to 2029.”

He added:

“We continue to actively pursue additional opportunities to further strengthen our balance sheet, lower interest costs and increase our operating and strategic flexibility. These actions increase our agility and further enhance our ability to successfully transform AMC in a post-pandemic environment, creating value for all of our stakeholders.”

AMC shareholders were also pleased to hear that Jim Simons Renaissance Technologies had nearly doubled its stake in AMC Entertainment during the last quarter of 2021.

Jim Simons is known as one of the most successful fund managers of the 2000s, and his bet on AMC could lead to higher prices in future as other investors follow him.

This year, the cinema operator is likely to perform better as moviegoers return to theaters amid the lifting of COVID-19 restrictions and the multiple blockbuster movies slated for release this year.

AMC shares look attractive at current prices, and I would buy them. Still, we could get further declines.

*This is not investment advice. Always do your due diligence before making investment decisions.

AMC Ent stock price.

Tradingview chart of AMC Entertainment stock price 15-02-2022
Source: Tradingview

AMC Entertainment stock has fallen 34.74% in 2022 but appears to have bottomed. What’s next?

Simon has over six years of professional trading experience across FX, commodities and equities. He has a strong passion for financial markets and is particularly focused on price action trading