How to Invest in AMC

AMC Entertainment (AMC 3.96%) 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, there’s no shortage of people who want to invest in it. 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 know you want to buy AMC stock, you can find out how to do it step-by-step below. After that, we’ll go into more details on AMC and whether this entertainment stock is a good choice as an investment.

Step 1: Open a brokerage account

To invest in AMC, and any other publicly traded company, you need a brokerage account. This type of account will also allow you to buy other types of investments, such as index funds and bonds. If you’ve invested before and you already have a brokerage account you’re happy with, go ahead and skip this step.

If you don’t have a brokerage account, or you 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 you want to invest and how frequently. 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. That refers to investing regularly on a set schedule, such as $250 per month.

Keep in mind that putting all your money in a single company is never recommended. If you don’t have any other investments yet, put only a small portion of your funds in AMC. That way, you also have money to put in other companies in order to build a diversified portfolio.

Step 3: Do your research

Spend some time reading up on AMC, including its financials, its leadership, and recent news about it. 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, which is why 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. You’ll find several exchange-traded funds (ETFs) with exposure to AMC later in this guide. These allow you to invest in AMC and a number of other companies, all in one transaction.

Step 4: Place an order

Log into 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 few options. If you want your order to go through ASAP, choose a market order. This places the order at the best available price, which is usually near the most recent ask price when you’re placing a buy order. Another option is a limit order, with which you specify the maximum amount you’re willing to pay per share.

Should you invest?

Should you invest in AMC stock?

AMC stock is an extremely risky bet, since it has been in free fall since the spectacular highs it reached in 2021. It’s still popular with meme investors, like members of the Reddit subreddit r/WallStreetBets, but that hasn’t helped it recently.

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 pandemic. In 2020, it lost $4.59 billion. That number has gotten better, with net losses of $1.27 billion in 2021 and $973.6 million in 2022, but those are still sizable losses.

AMC also has a massive amount of debt. It had almost $9 billion in long-term debt as of the second quarter of 2023, compared to only $435.3 million in cash.

The glass-half-full outlook would be that AMC could rebound, especially as the movie industry recovers from the pandemic, and that its low share price gives 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 a long way 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, as many prefer to watch movies at home.
• AMC’s share price had it in danger of being delisted from the New York Stock Exchange, and it completed a reverse stock split in August 2023 to counteract the low share price. However, the price continued to decline after that 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’re probably going to be disappointed. This stock is a long shot, and it’s far too volatile to become a large part of your portfolio.

Is AMC profitable?

Is AMC profitable?

No, AMC isn’t profitable, and it has a long way to go to get there. It posted a net loss of $973.6 million in 2022. That was less than the 2021, when it had a net loss of $1.27 billion. 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.

Does AMC pay a dividend?

Does AMC pay a dividend?

AMC doesn’t currently pay a dividend. It used to pay a quarterly dividend, but it hasn’t 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.

ETFs with exposure

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 and other companies to add more variety to your portfolio. Here are some ETFs with exposure to AMC worth looking into:

• The Roundhill Meme ETF (NYSEMKT:MEME) is the first ETF designed to track the performance of meme stocks. It’s currently the ETF with the largest percentage allocated to AMC stock. As you’d expect from an ETF tracking meme stocks, it’s volatile and has lost considerable value since its inception in 2021.
• The SoFi Social 50 ETF (SFYF 2.29%) invests in the 50 companies most widely held by the SoFi Active Invest community. Its largest holdings are tech stocks, including Apple (AAPL -0.35%), Tesla (TSLA -1.11%), and Microsoft (MSFT 1.82%). It also currently has exposure to AMC, since that’s another popular pick among SoFi investors.
• The Schwab Crypto Thematic ETF (STCE 1.64%) is designed to provide exposure to companies that could benefit from the development of cryptocurrencies. AMC has been an early adopter of cryptocurrency. It accepts several of the most popular coins and tokens, including Bitcoin (BTC -1.88%), Ethereum (ETH -0.02%), Dogecoin (DOGE -3.24%), and Shiba Inu (SHIB -4.12%).

Those ETFs hold more of AMC than most. You could also invest in a broader ETF with more companies, but less AMC allocation. Options include the Vanguard Small-Cap ETF (VB 0.54%), which focuses on small-cap stocks, and the Invesco Russell 1000 Equal Weight ETF (EQAL 0.25%), which is equally weighted across the 11 sector groups.

Will it split?

Will AMC stock split?

AMC completed a 10:1 reverse stock split on Aug. 24, 2023. Investors received one share for every 10 shares they'd held before the stock split. This reverse stock split allowed AMC to boost its share prices, which had fallen close to penny stock territory. Companies don't split their stock too often, so it's unlikely there are any upcoming stock splits in AMC's future.

The bottom line

The bottom line on AMC stock

AMC has a passionate fanbase, and it delivered incredible returns for a brief period in 2021. Unfortunately, it has largely been 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.