Shares of AMC Entertainment (NYSE:AMC) are teetering around the $5 level, as investors weigh their interest in AMC stock.
The stock is down about 2% on the day, despite the company announcing a new $3 movie ticket promo. Some investors are likely torn on the news, as it could imply both good and bad outcomes.
“AMC is bringing back its popular Summer Movie Camp program beginning May 27. Moviegoers can experience 14 different popular family titles throughout the summer months, with dedicated showtimes on Wednesdays and Saturdays. Select locations will carry the AMC Summer Movie Camp titles for $3 plus tax on Wednesdays and $5 plus tax on Saturdays. Approximately 400 AMC locations throughout the United States are participating.”
On the plus side, if it spurs traffic, then AMC Entertainment will benefit from higher margin sales on its food and beverages. On the downside, it will result in lower ticket revenue. In the context of this scenario though — as it’s only available for limited times through a certain date — the hope is that it spurs an increase in movie demand regardless of ticket revenue.
Getting away from the fundamentals a bit, AMC stock has been a favorite among retail traders. Some were likely hoping that a headline like this would stoke demand for the stock, sending shares ripping higher.
So far, that hasn’t been the case.
What’s Been Wrong With AMC Stock Lately?
AMC shares limped into 2023, coming in just a hair above the 52-week low. Then the stock made its current 52-week low just a few days later, on Jan. 6, as the stock bottomed at $3.77.
Going into its earnings report on the morning of Friday, May 5, shares were up 50% for the year. Unfortunately, the gains did not continue after earnings.
While AMC stock only finished lower by 0.5% in the first session after its earnings report, it’s been a landslide since. From the post-earnings high to last week’s low, shares were down more than 20%. Despite a mild bounce, the stock is still down about 18%.
That’s even after the firm delivered a top- and bottom-line beat. Further, it posted sequential gains in attendance, both internationally and domestically. AMC also slowed its cash burn.
While there were definitely some positives for AMC, there were clearly not enough positives for investors. That’s even as the studio industry slowly but surely regains momentum.
Perhaps if AMC stock can regain the $5.25 level, it can make a run back to its post-earnings high at $6.11. In the meantime, shares have been finding plenty of support in the $4.90s. If that changes, keep in mind the 52-week low is down below $4. That doesn’t mean it will go there, only that it has.
On the date of publication, Bret Kenwell did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
