AMC Entertainment (AMC -2.17%) has been on a wild ride in recent years, going from the verge of bankruptcy to skyrocketing thanks to meme investors. While AMC is still highly volatile and in a precarious financial position, it has retained some degree of popularity. Here's a detailed look at how to invest in AMC and what you should know about the company first.
How to buy
How to buy AMC stock
If you want to buy AMC stock, you can learn how to do it step by step below. After that, we'll discuss AMC in more detail and whether this entertainment stock is a good investment choice.
Stock
Step 1: Open a brokerage account
You will need a brokerage account to invest in AMC or any publicly traded company. This type of account will also enable you to buy other types of investments, such as index funds and bonds. If you've invested before and already have a brokerage account you're happy with, go ahead and skip this step.
If you don't have a brokerage account or don't like the one you're using, check out our picks for the best brokers. They all let you open an account online, and applying is quick and easy. Don't forget to transfer money to your brokerage account once you've opened it. Bank account transfers can take a few days to process, so by submitting one now, you'll be able to invest when you're ready.
Step 2: Figure out your budget
Decide how much and how frequently you want to invest. If you're just interested in adding AMC to your portfolio, you may want to make a one-time investment and see how it goes. Or you could go with dollar-cost averaging, meaning you'll invest a certain amount regularly on a set schedule, such as $250 monthly.
Keep in mind that putting all your money into a single company is never recommended. If you don't have other investments yet, invest only a small portion of your funds in AMC. That way, you have money left over to invest in other companies to build a diversified portfolio.
Step 3: Do your research
Spend some time reading up on AMC, including its financials, leadership, and recent news. Researching stocks is the most important part of investing because it lets you make an informed decision about where to put your money.
This can be time-consuming, so many investors opt for passive investments. If you're looking for a more convenient option than learning how to invest in stocks, investment funds are a good way to go. Later in this guide, you'll find several exchange-traded funds (ETFs) with exposure to AMC. These allow you to invest in AMC and a number of other companies, all in one transaction.
Exchange-Traded Fund (ETF)
Step 4: Place an order
Log in to your account and go to your broker's trading tool. Many brokers have both online trading platforms and mobile apps you can use. Enter the ticker for AMC stock: AMC. Select the option to make a purchase and enter the amount you want to spend.
You'll also need to select an order type, and there are a couple of options. If you want your order to go through ASAP, choose a market order. This places the order at the best available price, usually near the most recent ask price when placing a buy order. Another option is a limit order, which lets you specify the maximum amount you're willing to pay per share.
Should I invest?
Should you invest in AMC stock?
AMC stock is an extremely risky bet because it has been in free fall since it reached spectacular highs in 2021. Even among meme investors, like members of the Reddit (RDDT 1.46%) subreddit r/WallStreetBets, it has tailed off in popularity.
The biggest issue with AMC is that it's losing money. To be fair, as a movie theater company, it took a significant hit during the early stages of the COVID-19 pandemic. In 2020, it lost a staggering $4.59 billion. To its credit, that number has improved, with net losses of $1.27 billion in 2021, $973.6 million in 2022, and $396.6 million in 2023.
AMC also has a massive amount of debt. As of the third quarter of 2024, it had $8.3 billion in total debt and only $527.4 million in cash.
The glass-half-full outlook would be that AMC could rebound, especially as the movie industry recovers from the pandemic, and its low share price will give investors a chance to buy it at a hefty discount. While this is possible, it may be overly optimistic for a few reasons:
- There have already been several major releases in recent years, including Avatar: The Way of Water, Barbie, Spider-Man: No Way Home, and Black Panther: Wakanda Forever. Although these have helped AMC, the theater chain is still far from profitability.
- Streaming services are an increasingly popular alternative to movie theaters. While movie theaters aren't dead, their share of the audience has declined since many people prefer to watch movies at home.
- AMC's share price put it in danger of being delisted from the New York Stock Exchange, so in August 2023, it completed a reverse stock split to counteract the low share price. However, the price continued to decline even after the split.
The AMC short squeeze in 2021 was certainly an exciting time for investors -- at least those who were bullish on it. But if you buy AMC stock expecting a repeat performance, you'll probably be disappointed. This stock is a long shot and far too volatile to become a large part of your portfolio.
Profitability
Is AMC profitable?
AMC isn't profitable. It posted a net loss of $396.6 million in 2023. It has been trending in the right direction since its $1.27 billion in losses just two years earlier. But it's still losing a substantial amount of money, and there may not be a realistic pathway to profitability, especially considering its amount of debt.
Dividends
Does AMC pay a dividend?
AMC used to pay a quarterly dividend, but it hasn't paid one since 2020. Under a legal settlement related to AMC's stock conversion plans, AMC paid a 13.3333% stock dividend to shareholders on Aug. 28, 2023, as a one-time distribution.
Since AMC isn't making money, don't expect to see it start paying a quarterly dividend again in the near future. If you're looking for investments that will provide passive income, check out our dividend stock picks instead.
ETF options
ETFs with exposure to AMC
While many AMC investors own the stock individually, there are also quite a few ETFs that hold it. With an ETF, you can invest in AMC along with other companies to add more variety to your portfolio. Here are some ETFs worth looking into that have exposure to AMC:
- The SoFi Social 50 ETF (SFYF 0.92%) invests in the 50 companies most widely held by the SoFi Active Invest community. Its largest holdings are tech stocks, including Tesla (TSLA 1.54%), Nvidia (NVDA -0.24%), and Apple (AAPL 3.62%). It also currently has exposure to AMC since it's another popular pick among SoFi investors.
- The Optimize Strategy Index ETF (OPTZ 0.12%) invests in innovative American companies. It holds various big-name companies, including Nvidia, Salesforce (CRM 1.62%), and Dell Technologies (DELL 2.53%).
Those ETFs hold more AMC stock than most. You could also invest in a broader ETF with more companies but a smaller AMC allocation. Options include the Vanguard Small-Cap ETF (VB -0.24%), which focuses on small-cap stocks, and the iShares Russell 2000 Value ETF (IWN -0.08%), which invests in small U.S. companies thought to be undervalued by the market.
Stock splits
Will AMC stock split?
AMC completed a 10:1 reverse stock split in August 2023. Investors received one share for every 10 shares they'd held before the stock split. This allowed AMC to boost its share prices, which had fallen close to penny stock territory. Companies don't split their stock too often, so there will unlikely be any upcoming stock splits in AMC's future.
Related investing topics
The bottom line on AMC stock
AMC delivered incredible returns for a brief period in 2021. Unfortunately, it has largely gone downhill from there, and there's little reason to think it will bounce back. Investors are better off looking for companies with less volatility and more room for long-term growth.
FAQ
How to invest in AMC stock FAQ
Is AMC still profitable?
AMC isn’t profitable and hasn’t been for several years. It lost $396.6 million in 2023.
How high can AMC go if it squeezes?
AMC stock increased by more than 2,000% during a short squeeze in 2021, so its share price could, theoretically, skyrocket in that same type of situation. However, the odds of that happening again are extremely low.
Is AMC a buy, sell, or hold?
Analysts generally consider AMC a sell because of its precarious financial position and falling share price.
