What AMC JUST Said | Caused Stock to Selloff, then Rebound

folks it's not just about shares you're

not going to believe what amc

literally just released the statement on

let's get into this

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as well hey everyone meet kevin here

why is amc falling today in this video

i'm going to provide

answers as to why amc stock is falling

take a peek at this if we look at the

chart we'll see that currently at the

time of this recording

amc is recovering it's moving within

mostly within the lines that we've drawn

on our technical analysis here

it is presently down about 27.6

this is about the opposite of what

workhorse is doing workhorse is up about

22 percent

though workhorse has also had about a 20

movement in the day

given that it was up about 40 workhorses

about

47 short via short interest ratings from

s3 partners

amc sitting at about 18.09 percent short

according to s3 partners data

so uh now keep that in mind those are

estimates

from them does not necessarily mean it's

100 accurate

and there are questions in terms of how

synthetic shares are counted anyway

but keep that in mind that's sort of

what i've been using as a measure of

short interest

and i noticed that workhorse is insanely

high but aside from that

let's go ahead and understand why is it

that amc is falling why is amc down at

the moment now 28

what's happening what has changed well

folks it has to do

with shares being sold take a peek here

back in

april uh on april 27th there was an

indication that amc

might very important that we notice this

here and says in fact actually their

verbiage here is

we may through our sales agents

offer and sell from time to time up

to 43 million shares

and this is a prospectus agreement

between goldman sachs riley securities

and

citigroup global markets now this

becomes important

why or what does this actually mean here

in april well what this means in april

is

hey world just a heads up we're in talks

to sell shares of amc

and at some point in the future we might

decide to actually pull the trigger and

sell those shares

well folks let's take a look at what

happened today

today we had an ak released by

see look form 8k released today

june 3rd by amc and in this

8k see here's amc in this 8k we will

find

that amc has stated on june 3rd

2021 that's today that's really

important because there are a lot of

folks going

wait a minute that sale happened in

april that's fud

no it's not this is today

today amc is saying we have entered into

an equity distribution agreement with

again

riley securities and city group global

markets as sales agents to sell up to

11.55 million shares

of class a stock at

and this would be an at the market

offering now obviously at the market has

fluctuated a little bit between well now

forty six dollars and about sixty three

dollars

which was the prior closing price but in

other words

uh amc has has the right to to sell

11.55 million shares now this does two

things one it could put

downward pressure on the actual markets

if in the event let's say

amc sold these shares directly to

riley's securities

and then riley securities turned around

and sold them onto the market

it's entirely possible that they could

do that there is a note

in their prospectus that these shares

are going to take two business days to

settle but we don't really care about

them settling

you could sell before something settles

it's kind of like when when we

trade let's say if you buy 100 shares of

amc today

that's not going to settle for two days

but you could turn around

and sell it or transact again if you

wanted to

so that's more of like a an underlying

mechanics thing

but anyway we have 11.55

million shares being sold or up to

and if we multiply that out 11.55

million shares at uh let's say the

previous close of about 63

that's about 727 million dollars of

money that's being raised

even if they got the current price at 46

it's about 531 million dollars of

capital

that amc is able to raise and use

now keep in mind as of march 31st they

had about 11 billion dollars

in debt uh that number has changed

because we've started to pay down some

debt

but as of march 31st the debt reading

was about 11 billion dollars in debt

at the company what we can do also is we

could go to the june 3rd prospectus

and get some other insights because it's

not just the share sale

but it's also some of the verbiage

that's in this document and i think

that's very important to look at as well

take a peek here so this is where we

have the prospectus that says we have

entered into an agreement to sell about

11

550 shares but take a look at this folks

all right under no under the

circumstances

and this is where they talk about the

volatility of their stock going from

a low of a dollar 91 cents on january

5th

to an intraday high of 72 dollars on

june 2nd they talk about this volatility

right

after this volatility take a peek at

this under the circumstances

we caution against investing in our

class a

common stock unless you are prepared to

incur the risk

of losing all or a substantial portion

of your investment

folks amc is literally selling shares

and then telling you our stock is

overvalued

that's rough that's a really really

rough statement here

not only that but take a look at that

investing in our class a common stock

is highly speculative and involves risk

folks they're talking down their own

stock here now maybe

this is probably just cya you know cover

your

you know uh and that could be common

because

the last thing you want is people like

suing amc

and creating a bunch of legal headaches

for amc because people like well

well adam aaron implied he was an ape

and and

and therefore you made me buy the the

shares

you know they're being very clear here

that as they say here look at this

the market price of our class a shares

has experienced and may continue to

experience rapid and substantial

increases or decreases

unrelated to our operating performance

or prospects or

macro or industry fundamentals and

substantial increases may be

significantly inconsistent with the

risks

and uncertainties that we continue to

face

it to me it sounds like an attorney you

know just doing the the cya

but still i mean look at this they even

talk about a short squeeze here

a short squeeze due to a sudden increase

in demand for shares of class a common

stock

that largely exceeds supply or focused

investor trading in anticipation of a

potential squeeze

have led to and may currently be leading

to and could again lead to extreme price

volatility

in our shares and uh we

will plan to use this money for

corporate purposes which may include the

repayment of

refinancing of redemption of or

repurchasing of existing debt

acquisition of theater assets working

capital or capital expenditures

so you've got a two-folded attack on amc

here coming from the company

number one 11.5 million shares 11.55

million shares

that's a big dump but folks the

the warnings here in bold on the

prospectus

we caution you against investing in our

stock

unless you're prepared to risk losing

all or a substantial portion of your

investment

notice they didn't say or there's a

chance of you getting a ton of attendees

again i think this is just a lawyer you

know cya but folks

this is their document that's why

we're seeing a 27 sell-off on amc today

that's rough it's kind of rough you know

it's a little bit of a slap in the face

to the ape army i have to say

now uh i've i've mentioned that my

strategy on this has actually been

selling puts

which is which is a bullish move but i

haven't been buying

calls especially when we have a big

run-up like we did yesterday

uh so uh i'm i'm into i'm gonna get

assigned my puts tomorrow presumably

unless the market runs

and so if i get assigned i'll be in at

about 49

dollars right now we're at about 45

dollars so that puts me within about 10

not too shabby if we stabilize around

here we'll see what happens

and uh but yeah that kind of gives you a

little bit of an update as to what's

happening with amc

it is very risky and there are a lot of

they honestly they could continue to

raise shares

you know if if this goes up again

tomorrow 20 30

they might do the same thing again on

monday so just keep this in mind they

are being smart in terms of the business

aspect which is

paying down debt and raising money so

they can operate this is good for the

company in the long run though because

ultimately

we don't want them to be massively

indebted we want them to have cash we

want them to have money and we want them

to be able to

go make smart investments for the long

term there's an update for you if you

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