HomeBusinessCiti predicts AMC shares to plummet below $5 in the near future.

Citi predicts AMC shares to plummet below $5 in the near future.

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Shares of meme stock favorite AMC could be in for a significant decline, with a potential pullback of nearly 70%, according to Citi. The firm has lowered its price target on AMC stock from $15.50 to $4.75, based on recent company actions such as a reverse stock split, an equity raise, and a conversion of equity units into common stock. Citi has also reiterated a sell rating on AMC. The stock has already plummeted approximately 77% since the beginning of the year, far from its all-time highs during the Covid-19 pandemic and the meme stock craze. Analyst Jason Bazinet highlights the risk to the global box office due to the rise of multiple streaming services and suggests that the strategic role of exhibitors, like AMC, may be diminishing. Despite the company’s plans to use the funds raised to pay down its debt, Bazinet still considers AMC’s common equity stock to be overvalued.

AMC, a popular meme stock, could face a substantial decline of around 70%, according to Citi. The firm downgraded its price target for AMC stock from $15.50 to $4.75, citing recent actions taken by the company that include a reverse stock split, an equity raise, and a conversion of equity units into common stock. Citi’s sell rating on AMC has also been reconfirmed. The stock has already experienced a significant drop of approximately 77% since the beginning of the year, falling far from its peak during the Covid-19 pandemic and the hype surrounding meme stocks. Analyst Jason Bazinet highlights the potential downside risk to the global box office due to the increasing number of streaming services. He also suggests that the role of exhibitors like AMC may be losing significance. Although AMC plans to use the raised funds to pay off a substantial portion of its debt, Bazinet still considers the company’s common equity stock to be overvalued at its current levels.

The outlook for meme stock favorite AMC appears grim, with Citi predicting a potential pullback of almost 70%. The firm has revised down its price target for AMC stock, reducing it from $15.50 to $4.75. This decision follows a series of significant moves made by the company, including a reverse stock split, an equity raise, and the conversion of equity units to common stock. Citi reaffirmed its sell rating on AMC, as the stock has already tumbled around 77% since the start of the year, a considerable distance from its peak during the pandemic and the frenzy surrounding meme stocks. An analyst at Citi, Jason Bazinet, emphasizes the risk to the global box office as streaming services continue to multiply. Moreover, he suggests that the significance of exhibitors, such as AMC, may be diminishing. Despite AMC’s plan to utilize the cash raised to pay off a substantial portion of its debt, Bazinet contends that the company’s common equity stock remains overpriced at current levels.

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