AMC stock has lost 49 per cent of its value in the past ten days. Barring yesterday, the stock has closed all trading sessions below the opening price. This includes today’s trading session, where the price of AMC has dropped by almost 7 per cent.
AMC stock price had one of its largest rallies last year after the company started courting meme traders who boosted the prices to trade above $72. As a result, from January to June of 2021, the company’s share prices increased by more than 3,000 per cent. However, since then, the company has been on a downward trend that has seen the prices drop by more than 75 per cent. This is relevant today due to the latest aggressive bearish move that has seen AMC prices drop by almost half within ten days.
According to Motley Fool, the drying of meme traders and investors and the recent decisions by the management have put the company in a tough spot. This includes decisions such as the recent purchase of a nearly bankrupt gold mining company Hycroft Mining for $27.9 million. This is a huge diversion from what the company specializes in the movies. However, the purchase also is a clear indication of how the company believes it avoided going bankrupt due to its skills. However, data shows that the meme traders were part of why AMC made it through the pandemic unscathed.
Motley Fool also associates the current drop with a weak balance sheet. For instance, despite having only $1.76 billion cash in hand, the company has a corporate debt of over $5.4 billion. Therefore, the financial experts conclude that the AMC shares may be ripe for selling.
AMC Stock Prediction
The daily chart below shows AMC prices closing below their opening prices in 9 of the last ten days. During this period, the prices have dropped by 49 per cent. There is also a high likelihood that this drop will continue past 50 per cent.
Therefore, I expect AMC stock to continue with the downward trend in the coming days. I also expect the prices to hit the $13 support level. This is based on the current price volatility, which has seen the prices enter a long-term bearish move.