AMC Entertainment Holdings inc, the global movie theatre company, has been one of the most volatile companies on the stock market over the past year. The company was forced to shutter hundreds of cinemas in the US and Europe at the start of the COVID-19 pandemic. Bankruptcy has loomed large for AMC over the past year, and it’s not out of the woods yet.
More recently, AMC has been at the center of a fight between retail traders and Wall Street hedge funds. The stock has seen 50%+ moves in recent days, as individual investors rally behind the company’s shares and institutional investors look to short sell the stock.
So, is AMC a buy right now? And if so, how do you buy it?
In this guide, we’ll take a closer look at what the future holds for this theatre company and cover everything you need to know about how to buy AMC shares in the UK with 0% commission.
Step 1: Find the Best Stock App to Buy AMC Shares UK
In order to buy AMC shares in the UK, you’ll need a stock app that offers trading of this company’s stock. AMC is a mid-cap stock in the US that doesn’t normally see much trading attention, so only a handful of UK stock trading apps offer the shares.
On top of that, make sure to check whether your broker has put restrictions on trading AMC shares. Several US stock apps have limited trading of this company in response to recent activity, which could prevent you from entering a new position.
With that in mind, let’s take a closer look at two of the top UK stock apps that you can use to buy AMC shares today:
1. eToro – Trade AMC with a Social Network
AMC’s recent rise has been propelled by individual traders sharing ideas and coordinating over social media. So, the best way to trade this stock is with a social trading network of your own.
That’s precisely what eToro offers. With this stock app, you can connect with millions of other traders from around the world to share ideas, swap stories of winning and losing trades, and learn new strategies. The social network also allows you to track market sentiment around AMC stock in real time, which is critical when the shares are trading with such high volatility. Another key thing that eToro offers is an advanced charting and research platform. You can plot price movements at one-minute timescales and access more than 100 technical indicators and drawing tools on your smartphone. eToro also gives you access to a market news feed and up-to-date analyst research to help you trade market movements and see what professionals think about hot stocks.
eToro has a lot more than just AMC shares, too. This broker offers trading on more than 800 US shares and thousands of shares from the UK, Europe, Australia, Africa, and Asia, including top shares like Amazon and Tesla. eToro also offers ETFs and CFDs for forex, cryptocurrencies, commodities, and more. Stock CFD trading is 100% commission-free, or you can choose to buy shares outright.
eToro is regulated by the UK’s Financial Conduct Authority and accounts are backed by the Financial Services Compensation Scheme. The platform also offers 24/5 customer support by phone.
Fineco Bank is an Italian bank with a lot to offer for UK traders and investors. The bank offers trading on thousands of shares from the UK, US, and Europe. You can trade CFDs 100% commission-free, or buy shares outright with a commission of just £2.95 for UK shares or $3.95 for US shares. Fineco Bank also offers options trading on US stocks like AMC.
The Fineco Bank mobile stock trading app isn’t the most comprehensive trading platform, as it offers limited technical charting. However, it does come with helpful features like a market news feed and a global stock screener. The screener is especially useful for discovering new stocks with filters for country, market sector, recent performance, and more.
If you want advanced charting capabilities, Fineco Bank provides them through the web-based PowerDesk trading app. This software offers dozens of technical indicators and drawing tools, and the layout can easily be customised to suit your trading style. We found that the software works best on a desktop, although you can certainly use it on your smartphone to trade on the go.
Fineco Bank is especially nice if you also take advantage of the banking services. You can seamlessly move money between your trading and checking or savings accounts, and manage everything from the stock trading app.
Fineco Bank is regulated by the Bank of Italy and is a publicly traded company on the Milan Stock Exchange.
A lot has happened to AMC stock over the past year. So before you take a position in this company, it’s essential to have an idea of what the future might hold and how recent trading activity has affected AMC shares.
We’ll cover the basics you need to know and offer our take on whether AMC shares are a buy, sell, or hold right now.
AMC Share Price UK
Around the end of 2016, AMC shares, listed on the New York Stock Exchange (NYSE), hit an all-time high of over $35 apiece. By the end of 2020, the same shares were trading for just $2.12 – a loss of 94%.
The trouble for AMC began in 2017, when the company reported falling revenue for the first time. Ticket sales dropped 5%, even as AMC had gone on a multi-billion-pound spending spree to acquire smaller competitors.
With streaming heating up – Netflix was worth a fraction of what it is today in 2017, and services like Disney+ and HBO Max were on the distant horizon – investors quickly grew worried about the future of the movie theatre business. By the end of 2017, AMC shares had dropped to $11, a loss of more than 50% from the beginning of that year.
AMC shares continued to bleed as more streaming services prepared to launch. By February last year, before the coronavirus pandemic, AMC shares were trading at just over $7 each.
Then the pandemic hit, and AMC was forced to shutter hundreds of theatres in the US, UK, and Europe. The financial impact on the company was enormous – it went from being a profitable business to a money-losing business virtually overnight.
The company took on nearly $1 billion in debt in 2020, bringing its total debt load to around $6 billion. In December, AMC announced that it could declare bankruptcy if lockdowns in Europe weren’t lifted and consumer demand in the US didn’t rebound quickly.
Retail Traders vs. Hedge Funds
As all of this was happening, hedge funds were circling. Many placed enormous bets that AMC and other stocks like Gamestop (GME) would go bankrupt by short selling the stocks. In January 2021, AMC was one of the most heavily shorted companies on the US stock market.
Retail traders took notice and, in an effort coordinated using social media, particularly the Reddit group Wallstreetbets, bought millions of shares of AMC. The buying action drove up the price of AMC shares, forcing hedge funds to abandon their short bets – and driving the AMC stock price even higher. Within a one-week period, AMC shares skyrocketed from $2.97 to $20.36, a nearly 7-fold gain.
AMC was actually able to benefit from this tug of war. The company converted $600 million in debt into a new share offering, essentially wiping out 10% of AMC’s debt load.
The price action around AMC shares was so intense that many retail brokers in the US, such as Robinhood, restricted new buying activity. The move immediately caused AMC shares to drop by more than 50%, but prompted outrage at the financial industry in the US. Most brokers reinstated trading the following day, and AMC shares rebounded to around $14 apiece. At the time of writing, the fight over AMC shares is continuing.
AMC Stock Fundamentals
AMC is currently valued at a market cap of nearly $5 billion – up from $1 billion at the start of the year.
The company does not have a P/E ratio since it has lost money for most of the past year – in the most recent quarter, the company lost a whopping $35 per share. Prior to the pandemic, AMC was valued at a P/E ratio of around 27.2 with an earnings per share (EPS) between -$2 and +$2 depending on the quarter.
AMC Dividend Information
Prior to COVID-19, AMC paid a dividend of around $0.20 per share. The equivalent yield has varied widely due to the volatility in AMC shares, but this has typically been a yield of around 2% for investors.
In March of last year, AMC reduced its payout to $0.03 per share and then suspended it altogether. The move made sense given AMC’s new financial situation and given that many other companies were suspending dividends at the same time.
It is unlikely, though, that AMC’s dividend will return. The company raised $1 billion in new debt over the past year, and it needs all the cash it can get to continue to meet operating expenses and avoid bankruptcy.
Should I Buy AMC Shares UK?
AMC is a troubled company, so we recommend that investors either sell or avoid this company over the long-term. However, over the coming days to weeks, there is an opportunity to trade the stock’s current volatility. Let’s look at AMC shares over both the short-term and the long-term.
Short-term Trading around AMC
High trading volumes and high volatility around AMC stock is likely to continue for at least several more days, and likely several weeks or even months. While many of the original short sellers exited AMC shares, new short sellers are stepping in to bet against AMC stock at its current price.
Despite this, retail traders remain committed to buying the shares and holding their positions. As soon as retail brokers in the US relaxed trading restrictions around AMC shares, the stock jumped 54%.
So, you could trade the volatility around AMC either by leaning into the retail trading frenzy and buying the shares. Or, you could short sell the stock on the assumption that retail traders will soon move onto another target and the shares will fall.
In either case, it’s important to recognize that trading AMC shares right now is extremely risky. If you buy shares, the stock could easily fall back to around $2-$5 within a single trading session. If you short sell shares, you run the risk of being squeezed out of your position if the stock moves sharply upwards again.
Long-term Investing in AMC
Over the long-term, we are very bearish about AMC.
There is little reason to believe that the stock should trade above the baseline price of $2-$5, where it was trading before the current short squeeze action. The current price rise wasn’t predicated on any news, and it has not fundamentally changed much about AMC’s financial position or prospects for the future.
In fact, AMC is still in just as much danger of bankruptcy as it was in December. Eliminating $600 million in debt may buy it a few months of time, which may be enough to see it through to the end of the pandemic in the US and Europe. However, AMC will likely need to spend years reconditioning consumers to go to the movies after a full year of watching movies streaming at home.
The company won’t be helped in this effort by the fact that some movie studios, including Warner Bros., plans to release all 2021 movies to theatres and streaming simultaneously. That eliminates a huge incentive for consumers to go to AMC theatres at all. AMC was already struggling to turn a profit before COVID-19 hit, and it’s hard to envision a future in which movie theatres are more popular in the post-COVID world than they were in the pre-COVID world.
Even at a more reasonable valuation – say, if the share price falls back to $2 – investors should expect AMC to lose value in the long run, not gain value.
Step 3: Open a Brokerage Account
Ready to trade AMC shares? We’ll show you how to get started using the eToro stock app, which offers a built-in social network, advanced charting, and 0% commission trades.
To get started, head to Google Play or the Apple App Store and search for ‘eToro.’ Download and install the app on your device, then tap ‘Join Now’ to create a new account. Enter your name, email, and a username and password to create your new brokerage account.
Before you can start trading, eToro requires you to verify your identity. Simply take a photo of your driver’s license or passport with your phone and upload it through the stock app. You’ll also need to upload a photo of a recent utility bill that shows your address.
Next, add funds to your eToro account. The stock app requires a minimum deposit of £140, which you can pay by credit or debit card, bank transfer, PayPal, Neteller, or Skrill.
Step 4: How to Buy AMC Shares UK: Tutorial
Now you’re ready to trade AMC shares with eToro. Use the search bar to enter ‘AMC’ and tap on the stock when it appears. Then tap ‘Trade’ to open a new order form.
Select whether you want to buy or short sell AMC shares, and enter how much money (in US dollars) you want to trade. You can also apply leverage to your trade up to 5:1 and enter a stop loss or take profit order to manage your risk.
When you’re ready, tap ‘Open Position’ to trade AMC shares.
AMC Shares Buy or Sell?
AMC shares have been extremely volatile lately, which creates opportunities for short-term trading. However, given the tug of war over AMC stock going on right now, trading this stock is extremely risky.
If you buy shares, there’s a chance that the stock could collapse as traders move onto another highly shorted stock. If you sell shares, there’s a chance that another round of strong buying activity could force you out of your position prematurely. Whatever you decide, only trade with money that you are willing to lose.
For traders with a longer time horizon and who can afford to wait out a rise in AMC’s share price, short selling the shares is a potential opportunity. We believe that AMC stock is immensely overvalued at current prices, and that the company still faces stiff financial headwinds to avoid bankruptcy in the coming months. Even if AMC is able to recover, a share price of under $10 seems much more realistic based on the company’s fundamentals.
Our Verdict on AMC Shares UK
AMC stock has been extremely volatile over the past year, and the shares’ price action shows little signs of slowing in 2021. The stock has been at the center of a showdown between retail traders and major Wall Street firms – a fight that has pushed AMC stock far beyond any reasonable valuation.
Jumping into AMC stock right now is extremely risky. But for investors who gauge the stock’s trajectory correctly, the payoff could be significant. It’s difficult to say what will happen in the short term, but we have a bearish long-term outlook on AMC shares.
Ready to trade AMC shares in the UK? Click the link below to start trading with eToro today!
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How many theatres does AMC own?
AMC has 978 cinemas in the US, UK, and Europe.
Was AMC profitable prior to the COVID-19 pandemic?
AMC had a profitable quarter in 2018, but the company has largely lost money since 2017.
Can I short sell AMC shares?
Many online brokers, including eToro and Fineco Bank, allow you to short sell AMC using CFDs. Keep in mind that short selling involves more risk than buying shares.
How much debt does AMC have?
AMC recently offloaded $600 million in debt by issuing new shares. However, the company still has around $5.5 billion in outstanding debt.
How does AMC make money?
AMC makes most of its revenue through movie ticket sales. It also makes money by selling concessions such as popcorn and soft drinks.
Michael Graw is a freelance finance and trading journalist based in Bellingham, Washington. Michael’s expert trading guides and investment analysis articles have featured in many leading publications, such as TechRadar, Tom’s Guide, LearnBonds, and BuyShares.