AMC climbs 9% as CEO makes pledge not to sell newly authorized shares this year

adam aron, AMC CEO
AMC CEO Adam Aron.

  • AMC climbed as much as 9% on Thursday after its CEO said the company won’t sell any of the 500 million shares its seeking to authorize.
  • Adam Aron said if the company needs to raise short-term cash it still has some shares left from a prior authorization.
  • AMC, which has been a popular meme stock, is now up more than 365% in 2021.
  • See more stories on Insider’s business page.

AMC Entertainment shares climbed as much as 9% on Thursday after CEO Adam Aron said it will not sell in 2021 any of the 500 million shares it’s asked investors to authorize.

The company’s shareholders will vote on May 4 on whether to approve AMC’s request to increase its number of shares outstanding, which Aron plans to deploy in the coming years.

“We hereby pledge at AMC that if the shareholders approve this authorization for 500 million new shares to be issued, we will not use one of those 500 million shares in calendar year 2021. Not one,” CEO Adam Aron said in an interview published Wednesday on a YouTube program called Trey’s Trades, hosted by an independent investor.

AMC included Aron’s comments in a Thursday filing with the Securities and Exchange Commission. The company has roughly 450 million shares outstanding, according to Bloomberg.

The movie-theater operator has been working to recover from the hit the business took from the COVID-19 pandemic. The chain recently started to reopen its theaters after they closed to help reduce the spread of the respiratory disease.

Aron said in the YouTube interview that AMC still has about 43 million shares outstanding that were authorized in 2013. The company could use those shares to raise cash in the short-term if needed but that no decisions have yet been made on that matter, he said.

Asking for authorization to issue 500 million shares is part of the company’s preparation for operations on a longer-term basis, Aron said.

“If you give us the flexibility to use those shares when it makes sense for you, the shareholder, that’s when we’ll use them and not before,” said Aron.

AMC stock has surged from about $2 at the start of this year in part during major short-squeeze rallies that were fueled by retail investors active on Reddit’s Wall Street Bets forum. Shares are up more than 365% year-to-date.

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Retail stock traders are 33% less active than last month – and Goldman says the slowdown could continue as the economy reopens

investing problems
  • Trading activity among retail investors has dropped by 33% in April from last month, Goldman Sachs said in a note Monday.
  • The reopening of businesses and an increase in COVID-19 vaccinations may have contributed to the slowdown.
  • Stock buying by retail investors is still above pre-pandemic levels.
  • See more stories on Insider’s business page.

Retail trading activity has slowed down by more than a third in April, in part as people focus on getting back out after a year of COVID-19 restrictions and businesses restart as millions of Americans receive vaccinations, according to Goldman Sachs.

There’s been a 33% drop in broader volumes in US cash equity trading, or single-stock trading, this month from March, the investment bank said, citing data from retail brokerage Charles Schwab.

“We believe recently mixed equity performance and accelerating re-opening of the economy amid increased vaccination pace could partially explain the recent slowdown in retail activity,” Goldman Sachs equity analyst Alexander Blostein wrote to clients in a note published Monday.

The slowdown by retail investors reconciles with a decline in off-exchange market share by more than 400 basis points quarter-to-date compared with the same period in the first quarter of the year, “drifting to low 40%’s and closer to historical levels after reaching as high as 50% at various points in [the first quarter],” Blostein said.

Other firms that track activity by retail investors in recent weeks have also noted a slowdown. Investors who have received $1,400 stimulus checks in March as part of the US government’s COVID-19 stimulus efforts may have opted to purchase other goods and services, save the cash or pay down debt.

At the same time, the government has ramped up the availability of coronavirus vaccines to the US population, spurring many businesses to reopen their doors after closing them during the worst of the pandemic.

Still, retail trading remains significantly above pre-pandemic levels and features many structural changes such as zero-commission trading, said Blostein.

“While the degree to which retail will normalize is uncertain, further moderation in retail participation is likely to create meaningful headwinds to both US cash equity and option volumes.”

Retail investing has come into focus following the surge in interest in the stock market during pandemic, as well as volatility in so-called meme stocks that were stoked on social media sites such as Reddit. Video game retailer GameStop and movie-theater chain AMC Entertainment have been among the most popular names among retail investors looking to make a profit by squeezing short-sellers in the stocks.

A study by Schwab released last week showed that 15% of all US stock markets investors began investing in 2020. The median age of new investors is 35 years.

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AMC drops as movie-theater chain’s CEO again discusses potential issuance of 500 million shares

AMC Entertainment
  • AMC shares fell by more than 6% during Thursday’s session after the company reiterated plans to issue 500 million shares.
  • The movie-theater chain’s CEO sees an “opportunity” to bolster cash reserves and make other operational moves.
  • “We’ll be sensitive to dilution issues,” said AMC CEO Adam Aron on CNBC.
  • See more stories on Insider’s business page.

AMC shares fell Thursday after the movie-theater chain’s chief spoke about the company’s plan to issue 500 million shares.

AMC in a March regulatory filing said it wanted to increase the number of shares to total more than 1.02 billion and for shareholders to vote on the matter on May 4.

“We’ll be sensitive to dilution issues, but at the same time there’s an opportunity to bolster our cash reserves and there’s an opportunity to buy back debt at a discount or pay deferred theater rents,” AMC CEO Adam Aron said on CNBC’s “Squawk on the Street” program. “There are a lot of good reasons for shareholders to give us the authority.”

The company is already seeing benefits from the vaccination of millions of Americans from COVID-19 as well as from the release of new movies, Aron said.

Shares of AMC fell by as much as 6.3% to $9.56 before trimmed losses to 5%. The shares, which have grown in popularity among investors on Reddit’s Wall Street Bets forum, have leapt from around $2 each at the start of 2021.

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Retail investors could buy a record $3 billion of US stocks the day they get their stimulus money, one research firm says

Traders work on the floor of the New York Stock exchange
  • Retail investors could snap up a record $3 billion in stocks the day they start receiving their COVID-19 relief funds, says Vanda Research.
  • That could happen as soon as Wednesday or Thursday, when most Americans will start seeing $1,400 deposited into their bank accounts,.
  • Owning small-cap stocks could be a good way to position for this week’s event, says Vanda Research.
  • See more stories on Insider’s business page.

Retail investors could buy a record $3 billion of US equities in a single day when they receive their $1,400 stimulus checks from the US government, according to Viraj Patel, global macro strategist at Vanda Research

The firm says this could happen as soon as Wednesday or Thursday of this week. JPMorgan Chase and Wells Fargo have previously said their customers are slated to start getting the $1,400 checks on Wednesday.

Numerous Americans have already said on social media sites they’ve already received the cash approved by Congress and signed off on last week by President Joe Biden. The aim is to help reinvigorate the world’s largest economy after it was thrown into recession last year because of the coronavirus crisis.

A new round of cash coming into equities would take place at a time that the S&P 500 Index and the Dow Jones industrial average have hit all-time highs, spurred in part by investors rotating into cyclical stocks that should benefit from the recovery in the US economy. Many businesses have been reopening their doors as millions of Americans have received vaccinations to ward off COVID-19 infections.

“But besides just guessing past retail favourites (GME, TSLA, AMC, BB, NIO etc.) in the hope that retail traders will plow their stimulus checks into those stocks once again — we’d think owning small-cap indices (namely the Russell 2000) could be a good way to position for this week’s event,” Patel told Insider via email on Monday.

Vanda Research’s data analysis arm VandaTracks tracks retail investing activity in 9,000 individual stocks and ETFs in the US.

GameStop, AMC Entertainment and BlackBerry have become popular among retail investors who are active on Reddit’s WallStreetBets platform and who drove the January rally in those and other so-called meme stocks.

The small-cap Russell 2000 Index has gained about 19% during 2021, with movie theater operator AMC among its best performers. The company this week will begin showing films again in California, starting in the major market of Los Angeles.

Big buying of US equities on Wednesday would be on the same day the Federal Reserve will release its monetary policy statement. The Fed isn’t expected to make any changes on interest rates but investors will listen for indications from Fed Chairman Jerome Powell about when the central bank will begin to raise interest rates in the face of improvement in the economy.

Read more: Morgan Stanley says to buy these 12 stocks before their unique catalysts drive them to deliver market-beating returns

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LA movie theaters could reopen as soon as this weekend, according to California Gov. Gavin Newsom

tcl chinese theater amc los angeles la movie hollywood boulevard
This Tuesday, March 31, 2015 photo shows the interior of the TCL Chinese Theater on Hollywood Boulevard in Los Angeles. The Chinese Theatre, one of the largest Imax theaters in the world, is one of more than a dozen locations that Imax expects to outfit with laser projection this year.

  • Los Angeles, America’s largest movie market, could re-open movie theaters as soon as this weekend.
  • California Gov. Gavin Newsom said theaters could re-open if certain COVID-related goals are met.
  • If allowed to re-open, LA theaters will still have to limit capacity to just 25%.
  • Visit the Business section of Insider for more stories.

Los Angeles isn’t just where movies are made, it’s also the largest movie-going market in America.

And during the last 12 months, LA movie theaters have been closed due to the ongoing pandemic. That could finally end this weekend, according to California Gov. Gavin Newsom.

If Los Angeles County meets two critical metrics for new cases and vaccinations, Los Angeles movie theaters will be able to re-open with 25% capacity starting this Saturday.

In order to meet the criteria, LA County would need to have fewer than 1,000 new cases per day, CNBC reported. Additionally, statewide, 2 million vaccine doses must be administered to underserved populations.

During an address on Wednesday, Newsom said both metrics were on track to be met before the weekend.

Vehicles are parked at the first drive-in movie theatre for people to enjoy movies while keeping social distancing amid the spread of the coronavirus disease (COVID-19) in Bangkok, Thailand, July 2, 2020. REUTERS/Athit Perawongmetha
The first drive-in movie theatre amid the spread of the coronavirus (COVID-19) in Bangkok, Thailand.

Movie theaters in other parts of the US have already begun reopening as vaccines protecting against COVID have begun to roll out. New York City, for instance, reopened theaters last week at 25% capacity.

And some states, including Texas and Connecticut, have cleared theaters and other businesses for even larger reopenings without low capacity requirements.

Got a tip? Contact Insider senior correspondent Ben Gilbert via email (bgilbert@insider.com), or Twitter DM (@realbengilbert). We can keep sources anonymous. Use a non-work device to reach out. PR pitches by email only, please.

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GameStop, AMC, and other Reddit favorites climb as day traders look to reignite momentum

GameStop Clerk
A customer laughs with a clerk as he purchases a copy of the video game “Grand Theft Auto IV” at a GameStop store in New York

  • GameStop, AMC, and other Reddit-favorite stocks gained on Monday as day traders aimed to spark rallies similar to those seen in January.
  • The group of previously unloved stocks has fluctuated in recent sessions as bullish momentum locks horns with profit-taking.
  • The day traders lack the element of surprise they enjoyed earlier in the year, and regulators are investigating whether Reddit posts fueling the previous surges constituted manipulation.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

GameStop, AMC Entertainment, and other so-called meme stocks gained on Monday as retail investors looked to fuel new rallies.

The video-game retailer rose as much as 10.1%. AMC climbed 13.7%. BlackBerry and Express swung 5.2% and 7.4% higher, respectively.

The stocks have traded with elevated volatility in recent sessions as day traders congregating online try to repeat the surges seen at the start of the year. Recent posts on r/wallstreetbets and other trading forums praising the upswing garnered thousands of comments and votes of approval. And while the companies trade well below their January highs, they still boast huge year-to-date gains.

The gains follow broad selling across the Reddit favorites. The stocks tumbled in Friday trading after rising the session prior, underscoring the back-and-forth action seen since January’s extraordinary rallies.

Retail investors looking to lift prices again face a tougher challenge. The Reddit-savvy traders had the element of surprise when they first bid up shares, and their ability to shock the market establishment quickly publicized the trade. The stocks’ unusually high short interest also exacerbated the rallies as bearish investors had to buy shares to cover their souring bets.

Those surges are old news now, and Wall Street has caught on to the Reddit traders’ antics. Hedge funds started tracking posts on relevant forums to monitor which stocks day traders could target next.

Separately, regulators are looking into the January price action to determine its legality. While the Reddit crowd has repeatedly indicated they simply “like the stock,” those warier of the sudden climbs suggest the online communication could qualify as market manipulation. 

A new report suggests bots also played a significant role in driving hype around the trade. Fake accounts on major social media platforms amplified calls to buy and hold shares of GameStop and other relevant stocks, Reuters reported, citing analysis by cybersecurity company PiiQ Media. Still, it’s unclear how much of an impact the bots had on the rallies.

Lawmakers have already taken steps to better understand the market phenomenon. The House Financial Services Committee held a hearing in February on the matter, and the Senate Banking Committee is poised to do so. 

GameStop closed at $101.74 per share on Friday, up about 428% year-to-date.

AMC closed at $8.01, up 270% year-to-date.

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Robinhood’s IPO filing could reportedly come as early as March

Vlad Tenev Robinhood

Investment platform Robinhood is expected to file for an IPO as early as March, according to Bloomberg, citing sources close to the company. 

The outlet had reported in early February that Robinhood was planning for a traditional IPO around May. Since then, however, sources told Bloomberg the company has held talks with underwriters about possibly moving the filing up. No final decisions have been made, sources told the publication. 

Robinhood did not immediately respond to Insider’s request for comment. 

The company had been eyeing an IPO as early as 2018 and initially targeted the year 2021. Last year, Robinhood was valued at nearly $12 billion, and in December, Reuters reported the platform hired Goldman Sachs to lead an IPO that could value the fintech startup at more than $20 billion. Bloomberg is now reporting the IPO could be valued at around $30 billion due to its latest fundraise. 

Robinhood raised $3.4 billion from backers to help post collateral with the Depository Trust & Clearing Corporation, Bloomberg reported. The app had become tight on cash after the Gamestop short-squeeze that rattled markets earlier this year. Aside from a traditional IPO, Bloomberg reports the company is also exploring a direct listing or a SPAC merger. It has also considered selling shares directly to its users, though such a move would be uncommon. 

Since the beginning of the year, Robinhood has been engulfed in scandal. In late January, many of its users –some convening on the Reddit forum r/WallStreetBets— started buying shares of companies such as Gamestop and AMC, squeezing hedge funds. Robinhood then temporarily restricted users from buying shares in those companies. The company said in a blog post it did this to help meet its deposit requirements, but that hasn’t stopped it from facing backlash and accusations of market manipulation.

It is also facing nearly 90 lawsuits over the matter and faced a hearing by the House Finance Services Committee.

Bloomberg reports an IPO could help Robinhood secure future financing to appease regulators by increasing its cash buffer. It could also help the company grow. The platform had over 13 million users by the end of last year, and became increasingly popular as young people used the app amid the pandemic – some to earn extra cash, some for leisure.

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GameStop extends 2-day surge to 278% as Reddit meme stocks find renewed life

GettyImages 1230960416

GameStop surged as much as 85% on Thursday after the stock more than doubled the previous day. The two-day move of 278% has been part of a broader surge for so-called meme stocks popular on Reddit.

The stock rose to an intraday high of $170 per share at of 9:35 a.m. ET after closing 104% higher at $91.71 on Wednesday. Among other Reddit stocks, AMC Entertainment rose 21%, Express Inc climbed 22%, and Koss gained 90% at intraday highs.

GameStop’s spike was spurred by a spike in final hour of regular market hours on Wednesday, after a session that saw trading in the stock halt multiple times due to volatility. The video-game retailer came back into focus after it announced the resignation of its chief financial officer, Jim Bell.

Sources told Insider Bell didn’t actually resign voluntarily, but was forced out by the board as part of a push by activist investor Ryan Cohen. The board aims to make way for an executive that is more in line with Cohen’s strategic vision.

Cohen’s addition to the board in early January, along with his boosted investment stake in the company, fueled the first flurry of moves in GameStop.

After GameStop’s stock doubled, Reddit’s website suffered an hour-long outage in after hours-trading. It is unclear whether the two instances were related, but the Wall Street Bets subreddit page is known to be a popular forum for day traders that recently triggered a rally in multiple shorted stocks.

The clearinghouse that forced Robinhood to restrict trading in volatile stocks because of higher margin requirements published a whitepaper on Wednesday that laid grounds for accelerating the stock-settlement process.  The Depository Trust & Clearing Corporation proposed shortening the settlement cycle for US equities to one day from two, prompting some renewed interest from the retail crowd on Reddit.

Read more: GOLDMAN SACHS: These 40 heavily shorted stocks could be the next GameStop if retail traders target them – and the group has already nearly doubled over the past 3 months

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GameStop surges another 85% alongside other popular Reddit meme stocks like AMC and Koss

GettyImages 1230960416

GameStop surged another 85% in early trading on Thursday after the stock more than doubled the previous day. The move was part of a broader surge for so-called meme stocks popular on Reddit.

The stock rose to an intraday high of $170 per share as of 9:35 a.m. ET, after closing 104% higher at $91.71 on Wednesday. Among other Reddit stocks, AMC Entertainment rose 18%, Express Inc climbed 21%, and Koss gained 78%.

GameStop’s spike was spurred by a spike in final hour of regular market hours on Wednesday, after a session that saw trading in the stock halt multiple times due to volatility. The video-game retailer came back into focus after it announced the resignation of its chief financial officer, Jim Bell.

Sources told Insider Bell didn’t actually resign voluntarily, but was forced out by the board as part of a push by activist investor Ryan Cohen. The board aims to make way for an executive that is more in line with Cohen’s strategic vision.

Cohen’s addition to the board in early January, along with his boosted investment stake in the company, fueled the first flurry of moves in GameStop.

After GameStop’s stock doubled, Reddit’s website suffered an hour-long outage in after hours-trading. It is unclear whether the two instances were related, but the Wall Street Bets subreddit page is known to be a popular forum for day traders that recently triggered a rally in multiple shorted stocks.

The clearinghouse that forced Robinhood to restrict trading in volatile stocks because of higher margin requirements published a whitepaper on Wednesday that laid grounds for accelerating the stock-settlement process.  The Depository Trust & Clearing Corporation proposed shortening the settlement cycle for US equities to one day from two, prompting some renewed interest from the retail crowd on Reddit.

Read more: GOLDMAN SACHS: These 40 heavily shorted stocks could be the next GameStop if retail traders target them – and the group has already nearly doubled over the past 3 months

Read the original article on Business Insider

GameStop surges another 58% along with top Reddit meme-stocks including AMC and Koss

GettyImages 1230960416
  • GameStop shares extended their rally early on Thursday, along with other Reddit favorites AMC and Koss.
  • Renewed activity in GameStop led to an hour-long outage for Reddit – the hub of last month’s frenzy. 
  • The company is back in focus after it announced the resignation of its CFO, Jim Bell.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

GameStop surged another 58% in early trading on Thursday, after the stock more than doubled the previous day, in a move that sent shares in other Reddit-favorites soaring.  

The stock rose to $144.08 per share as of 05:50 a.m. ET, after closing 103% higher at $91.71 on Wednesday. Among other so-called “meme-stocks” that were at the center of Reddit’s buying frenzy, AMC Entertainment rose 17%, Express Inc rose 15%, Koss gained 57% in pre-market trading.

GameStop’s spike was spurred by a spike in final hour of regular market hours on Wednesday, after a session that saw trading in the stock halt multiple times due to volatility. The video-game retailer came back into focus after it announced the resignation of its chief financial officer, Jim Bell.

Sources told Insider Bell didn’t actually resign voluntarily, but was forced out by the board as part of a push by activist investor Ryan Cohen. The board aims to make way for an executive that is more in line with Cohen’s strategic vision.

Cohen’s addition to the board in early January, along with his boosted investment stake in the company, fueled the first flurry of moves in GameStop.

After GameStop’s stock doubled, Reddit’s website suffered an hour-long outage in after hours-trading. It is unclear whether the two instances were related, but the Wall Street Bets subreddit page is known to be a popular forum for day traders that recently triggered a rally in multiple shorted stocks.

The clearinghouse that forced Robinhood to restrict trading in volatile stocks because of higher margin requirements published a whitepaper on Wednesday that laid grounds for accelerating the stock-settlement process.  The Depository Trust & Clearing Corporation proposed shortening the settlement cycle for US equities to one day from two, prompting some renewed interest from the retail crowd on Reddit.

Read the original article on Business Insider