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Labeled as a meme stock, AMC has significantly been fueled by social media influencers.
AMC Entertainment Holdings Inc (NYSE: AMC) stock price during the Wednesday trading fell to $33.43, down over 15% from the day’s opening price. The dip continued during the extended trading period, whereby AMC stock was trading around $32.25, -3.53%, according to metrics provided by MarketWatch.
However, the dip is less significant compared to the 1,476% rally experienced year-to-date. Additionally, AMC’s stock price has added approximately 642%, and 257% in the past year and three months respectively.
Notably, over the past month, AMC stock price has experienced a strong resistance level after hitting an ATH of $72. Having broken the daily support level around $40 in the past two days. AMC stock price is poised for more correction.
Labeled as a meme stock, AMC stock price has significantly been fueled by social media influencers. However, the enthusiasm seems to be running out as the company’s fundamentals catch up with the speculative aspect.
Several market strategists have indicated an imminent price fall instigated by a lack of business growth. According to a survey conducted by MarketWatch, out of 9 ratings AMC stock received an average of Under rating, signifying a sell.
Additionally, Maneesh Deshpande, Barclays head of US equity strategy and global equity derivatives said the descent just began. “While the declines in these asset prices have been rapid, their levels are still historically elevated, which could lead to further pain in the future,” he noted.
AMC Stock Price and Market Outlook
AMC stock has been categorized in the same class of meme stocks as GameStop Corp (NYSE: GME). Notably, GME stock closed yesterday trading at $167.62, down 6.91%. Meanwhile, the dip extended by approximately 5.74% during the after-hours trading session.
AMC has seen its market valuation skyrocket in the past few months and intends to make more acquisitions with the cash. Recently, the company sold 11.5 million more shares amid the price volatility.
According to the company through an SEC filing, it managed to raise approximately $587.4 million through stock selling.
However, market analyst at Loop Capital, Alan Gould said the company has little hope of stock rally in the near future. “AMC has little hope of gaining significant market share and will have to pay cash for acquisitions, debt retirement, and executive compensation,” he said in a note.
With a market capitalization of approximately $19.75 billion as of the time of reporting, AMC management has the chance to prove its competence to investors.