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Movie theaters took a beating during the pandemic, forcing them to shut down then limit seating when states allowed them to reopen. Instead of debuts of anticipated surefire blockbusters like "Wonder Women: 1984" taking place at theaters, streaming networks scored big, debuting movies for one price or a membership to services like Disney+ (which debuted the live-action "Mulan") and HBO Max (which debuted Zach Snyder's 4-hour "Justice League").
As more and more states cut back on restrictions, the question is whether streaming has officially killed off movie theaters or if the theaters will rebound. Those betting on the theaters are especially interested in AMC, which like the seemingly dead in the water GameStop, received a boost from WallStreetBets on Reddit. As of April 1, 2021, the stock was rising after a steady fall at $10.21 a share. Thinking about getting in on this risky business? Here's how.
You can purchase AMC stock shares through several online brokerage accounts. Here’s a look at three brokers who offer AMC stock purchases and how they compare.
Stash is an intuitive investment platform that lets you buy shares – whole or fractional – of stocks, bonds, and ETFs. Creating an account takes less than 10 minutes and once you connect a source of funding, buying $10, $50, or $100 of security is easy.
There are three levels of plans, costing $1, $3, or $9, depending on which features you want. The highest level gives you two custodial accounts so you can invest for your kids, nieces and nephews, or grandkids. All levels give you a debit card account and a $1,000 life insurance policy.
With a free Robinhood investment account, you can be investing in AMC stocks in no time. A fun feature is that new users receive a free stock to get started investing upon successful signup. Robinhood supports fractional shares so you can set your investing on autopilot with monthly purchases in a dollar amount of your choice. It also allows pre-market and after-hours trading, which is attractive to experienced investors.
Although it's free to have a Robinhood account, for just $5 a month, you can get access to Robinhood Gold which allows margin trading and you get Morningstar reports so you can delve deeper into investing. There are small regulatory fees that are passed on to users when you sell an investment.
The present-day AMC Entertainment Holdings Inc was founded in 1920 and was one of the first movie theater chains in the United States. It now has more than 1,000 theaters, and about 11,000 screens, across the globe.
AMC stock has had a rough up and down ride since it was initially offered on the New York Stock Exchange (NYSE ticker symbol: AMC) in December 2013.
Then, it started strong, reaching a stock price of more than $36 a share – double the IPO price – within two years. Unfortunately for investors who have held on, the outcome hasn’t been as positive in the years since.
In recent weeks, AMC stock has benefitted from the online Reddit forum, WallStreetBets, which caused stock prices to jump and reach highs that hadn’t been seen since 2019.
This move gave new hope to the theater chain, which has had negative EPS (-$39.15) and a P/E ratio of 3.84. Experts say the price target for the coming year is between $1 and $7. Of course, this hurt the hedge funds holding AMC stock as the share price rose considerably.
AMC price history
It’s been a wild ride for shareholders of AMC stock. The IPO was set at $18 per share, which means that a purchase of $1,000 got you 55.5 shares. The stock saw its all-time high of just over $36 a share in 2015. However, it’s only been downhill, with a few peaks, since then.
As of this writing (Q2 of 2021) AMC stock is trading for $10.21 per share. Assuming you’re still holding on to all 55.5 shares, their value is $564 currently. That’s a loss of $433.
AMC dividend info
AMC paid out quarterly dividends from 2014 through the first quarter of 2020. The average dividend yield was 2%. All but the final dividend gave shareholders $0.20 per share. The last dividend was just $0.03 per share. The Board of Directors has suspended the disbursement of dividends for the time being.
Best features of AMC stock
Currently, AMC has a $5.125 billion market cap, which gives hope to investors. Here are three reasons AMC has the potential to continue its upward trend.
1. The company is getting back to business post-Coronavirus pandemic. Theater chains like AMC took a massive hit during the pandemic of 2020, with AMC being no exception. The good news is that with the vaccine being distributed, infection rates are dropping, and businesses are getting the go-ahead to reopen. After months of being stuck at home, many consumers are eager to get back to the movie theater experience with large screens and free-flow soft drinks to wash down buckets of buttery popcorn.
2. Low Federal Reserve interest rates allow AMC to manage its debt. The Federal Reserve stated that it’s committed to keeping interest rates low, which is just as good for large corporations like AMC as it is for the average consumer. AMC has a lot of debt, more than $6 billion, and low-interest rates will allow them to tackle that while helping the business become more profitable. This, in turn, will positively impact AMC stock prices.
3. The shutdown of theaters forced AMC to innovate. When theaters shut down in 2019, there was no money coming in. People streaming movies online weren’t ordering their favorite theater snacks from the theater via DoorDash. But during 2020, AMC started offering movie streaming. As they got the green light to reopen, they started renting out screening rooms for groups of up to 20 to watch a film in a private theater. There is hope that they will continue to develop creative and profitable ideas even as they are allowed to reopen and show the latest releases.
Step 3: Open an account & buy AMC shares
Opening a Stash brokerage account is easy and won't take more than 10 minutes. You'll need a few basic details that you've likely committed to memory: name, address, phone number, Social Security Number. Easy enough, right?
Let's get started.
After you enter your name, email, address, and phone number, you'll go through a series of screens that ask quick questions, which will help the platform guide you in your investing.
First up, they ask you to choose which plan you want. If you're not sure, go with the $1/month plan. You can always upgrade later, and this is sufficient to get started investing in AMC stock.
Next, you need to pay for the plan, so choose your preferred payment option. They prompt you to pay for a year at a time, but there are no extra savings for choosing that over month-to-month.
Now take a second to choose your current employment status.
And another to choose a net worth bracket. In case you're not sure, your net worth is the total value of your assets, minus liabilities. So if your house is worth $150,000 and your car is worth $20,000, the value is $170,000.
Then, you need to subtract your mortgage and car loan amount. We'll say that the total of those two is $110,000.
The difference between those two numbers is $60,000. So you have a net worth of $60,000.
The last of these more personal questions is about your tax filing status. Are you single or married, or widowed? If married, do you file with or without your spouse? Click the appropriate box.
Next up is how much you already have saved for retirement.
This screen asks whether or not you've paid your bills on time over the past year.
Some questions about your savings: how long will your savings tide you over if you don't have any money coming in?
And how much of your income do you spend?
Next is a question about your financial goals over the long term.
How experienced are you with investing? And what is your risk tolerance?
Hang on, just a few more questions. How long do you plan to invest your money?
Remember that if you need a certain amount of money within the next five years – for a down payment on a home or paying for your wedding – you don't want to invest it. Put it in something with very low risk for short-term capital preservation. You can use a high-yield savings account, money market account, or certificate of deposit.
Next, you'll need to disclose whether or not you have professional ties to the financial industry.
Now, enter your Social Security Number.
Read and agree to the terms and conditions, and you're done!
Once your account is funded, you can start investing in shares of AMC and other companies that are listed on the NASDAQ and Dow Jones.
Just click the “invest” button and search by the stock’s name or symbol.
Here’s what it looks like.
Choose how much you want to invest, and click the buy button.
You’re all done!
How much were AMC shares when the company first went public?
When AMC Entertainment Holdings, Inc. went public in December 2013, shares were $18 each.
How much does it cost to buy AMC shares today?
As of this writing, in quarter 2 of 2021, AMC shares are trading around $10 per share.
Does the AMC stock pay dividends?
From 2013 until the second quarter of last year, 2020, quarterly dividends were paid out to AMC shareholders. With the plunge in revenue due to theater operators having to close worldwide, the dividend program was suspended for the foreseeable future.
What is the minimum number of AMC shares that I can buy?
Some stockbrokers require investors to buy whole shares of a stock, but on platforms such as Stash and Robinhood, you can purchase fractional shares. So if you don’t want to commit to a full share of AMC stock, you can buy $5 worth of it.
The bottom line
The whole entertainment industry has had a rough year. It’s impossible to predict the future, but with cinemas reopening and people eager to leave their homes and watch the latest blockbuster while mindlessly munching on popcorn, there’s room for optimism. The Motley Fool website is a great place to get opinions on a stock valuation and other market data.
With the volatility of AMC Entertainment stock, be careful when choosing how much you will invest in AMC. Having a diversified portfolio in the stock market is the best way to reduce your overall risk.