Shares of AMC Entertainment Holdings (AMC 0.44%) are moving higher yet again today, rising 64.5% at 11 a.m. ET on Monday. Last week's holiday-shortened trading period saw the movie theater operator gain nearly 10% for the week.
There's no company-specific news to account for the gain today (or last week for that matter), but the meme stock is still driven more by social media chatter than business fundamentals, the kind of fundamentals that forced industry peer Cineworld Group to file for bankruptcy protection last week.
AMC maintains it's not like its rival because, in the words of CEO Adam Aron, the movie theater chain was able to "raise boatloads of cash" using its stock last year. Indeed, AMC has a little less than $1 billion on its balance sheet and the recent creation of the AMC Preferred Equity (APE) stock opens up a new avenue of opportunity to raise more cash if necessary.
The cash AMC raised as it seemingly careened toward a bankruptcy filing of its own ended up maxing out its stock issuance limits while diluting existing shareholders. While the new APE stock gets around those ceilings, it opens up the probability of more dilution for shareholders.
AMC's hold on any gains is always tenuous and while internet stock traders may chat up its shares from time to time, the real test is whether the movie theater industry can improve. It comes down to Hollywood producing films audiences want to see and then getting them into the seats to watch them.
Competition from streaming services is as robust as ever, and Hollywood's blockbuster abilities have been hit or miss this year.