Antara Capital Just Dissolved Its Stake in AMC Stock

Source: Ian Dewar Photography / Shutterstock

Antara Capital recently sold its stake in AMC Entertainment (NYSE:AMC). This came as Antara’s preferred APE shares were converted into common stock and the company finished its 1-for-10 reverse stock split.

Short sellers were also able to liquidate positions at a profit as the movie theater chain looked to life beyond its “meme stock” status. Shares of AMC Entertainment have fallen 70% in the last one month.

Despite all the bad news, however, shares managed to jump 16% on Aug. 30 and another 9% overnight. AMC stock opened today, Aug. 31, at $13.90 per share and a market capitalization of around $800 million. Now, shares are up just 1% for the day, trading closer to $13 per share.

What could save AMC? Maybe a good, “Swift” kick on the revenue line.

AMC Stock: Beyond the Meme

Taylor Swift, who has improved local economies across the U.S. this summer, is now giving AMC stock a lift.

Specifically, the singer announced that a film version of her “Eras Tour” will play in AMC theaters — and even in the IMAX format — starting Oct. 13. All AMC theaters will screen the film four times per day that initial weekend, from Thursday to Sunday.

AMC has also gotten a big pile of cash from the APE conversion, while short sellers now face higher fees to borrow the stock. With legal battles over the conversion now over, AMC will see lower legal costs as well.

This means that, while the “meme” investors were wiped out, there are now new reasons to see hope in the stock. Additionally, AMC management can now sell more shares and improve the cash position further.

Shares are now a relative bargain, selling for less than one-fifth of this year’s estimated revenue of $4.62 billion. AMC saw sales growth of 15% in the second quarter and even earned a modest profit.

That said, the company is not out of the woods. There seems to be no end in sight for the strikes by actors and writers in Hollywood. New film openings are being pushed to 2024, meaning there may be little for AMC to sell beyond Taylor Swift this Christmas.

What Happens Next?

Some bulls believe the releases of Dune: Part Two and the Swift concert film will ensure that AMC is profitable in the near term. Meanwhile, some of the bears say CEO Adam Aron has scammed small investors.

Maybe AMC will become boring again.

On the date of publication, Dana Blankenhorn did not hold (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 Publishing Guidelines.

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