AMC Stock Pops After Rolling Out Reopening Plan

The firm plans on reopening an additional 300 theaters in subsequent weeks

Deputy Editor
Aug 13, 2020 at 10:57 AM
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The shares of AMC Entertainment Holdings Inc (NYSE:AMC) are up 8.8% at $5.05 after the company announced that it plans to reopen 100 theater locations on August 20, in celebration of its 100th anniversary. The company will be honoring 1920s ticket prices of 15 cents each on the first day of reopening. An additional 300  theaters have reopenings planned for the subsequent weeks.

Today's pop has the theater giant breaking out past recent pressure at the 60-day moving average -- a trendline that's been keeping a lid on the shares since mid-June. Year-to-date, the equity is still down 31.8%, though the $4 level appears to have formed as a floor on the charts. 

Analysts are still  bearish on AMC. Currently, eight out of the 10 in coverage sport a "hold" rating on the stock, with the remaining two at a "strong sell." Meanwhile, the 12-month consensus price target of $3.50 is around a 28% discount to current levels, meaning a round of analyst adjustments could be on the horizon. 

In the options pits, AMC's 10-day call/put volume ratio of 2.37 at the Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) stands in the 62nd percentile of all other readings from the past year. This reveals that while calls are more than doubling puts, this rate of call trading is only slightly higher than it has been in the last 12 months. 

That said, speculating on AMC's next move with options could be a prudent play. The stock's Schaeffer's Volatility Index (SVI) of 94% stands higher than just 9% of all other readings in its annual range, implying that options players are pricing in relatively low volatility expectations at the moment

 

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