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AMC Entertainment (NYSE: AMC) is once again on fire, with the stock price up nearly 20% on February 24th alone. On Monday, February 22nd, Governor Cuomo announced the planned reopening of theaters for the following week. This gave AMC the jumpstart it needed as it looked to recapture momentum following the decline in interest of r/wallstreetbets.
On March 25, the stock soared 373% and AMC announced it would open theaters to 50% capacity in California and New York. The company plans to release new movies in theaters and online.
How to Buy AMC Stock
Follow these simple steps when you’re ready to buy AMC stock:
- Pick an online broker. What do you value most as a trader? Whatever that is, pick a broker based on your needs. Do you prefer in-depth educational resources or need to tap into a really excellent platform?
- Open your account and install the platform. Once you’ve selected your broker, you can begin setting up your trading environment. If you want to trade on the go, make sure you download your broker’s mobile app.
- Buy AMC stock. Once you have your account set up, you can begin watching and trade AMC stock when you’re ready.
Pick a Brokerage
An online broker makes it easy for you to buy and sell stock on the go from your phone or via a desktop platform. Signing up online is simple, but choosing the best brokers should take a bit more time and legwork.
Brokerages know you want a streamlined experience with built-in tools, education and analytics. Determine your own priorities for the service you expect and compare that list with each platform’s offering.
Take a look at our considerations for choosing a broker before you commit:
- Do you want a self-managed or advisor-managed account? If you’re an experienced, confident trader, self-managed is a good option. Beginners can benefit from an advisor and you may want to pay the additional fees.
- How much do you want to pay in fees? Commissions may apply. Do the math before you start trading and don’t forget about annual fees or fees per share.
- What is the account minimum? Some platforms have $0 minimums. Others have higher account minimums and some brokers may have penalties if your minimum isn’t met. Check into each trader’s requirements.
- What kind of data do you need? And how much? Some brokerages have platforms with market data fully integrated.
- Do you want a desktop, web-based or mobile experience? Pay attention to whether or not a broker’s design is reportedly intuitive or clunky.
- What type of customer service do you expect? Many platforms can deliver 24/7 live customer support via chat or email. Don’t settle for less.
Decide How Many Shares You Want
The number of shares you should buy depends on the price of AMC. For example, let’s say you have $2,000 to invest and AMC’s current stock price is $5 (so you’re comfortably under the stocks under $10 category). You could buy 400 shares of AMC stock. The number of shares you buy depends on your risk tolerance as well. Investing in a single stock opens you up to less diversification than if you were to, say, invest in a mutual fund or ETF.
Choose Your Order Type
If you’re new to investing, you want to know several stock order types to understand before you purchase AMC stock. Your broker will ask you which type of order you want to place.
Here’s our quick rundown of the most common orders you’ll encounter:
The bid price represents the maximum amount of money that a buyer is willing to pay for a share of AMC stock.
The ask is the price a seller is willing to accept for a security. This is also referred to as the offer price.
The spread is the difference between the lowest ask price and the highest bid price. For example, if the lowest ask price for a share of AMC stock is $5 and the highest bid price is $4.75, then the spread for AMC stock is $0.25.
A limit order is a type of order to purchase or sell a security at a specified price or better. For buy limit orders, the order will execute only at the limit price or lower.
For sell limit orders, the order will be executed only at the limit price or higher. Limit orders allow you to better control the prices you trade.
A market order tells your broker that you want to buy the next available shares of AMC, no matter how the market moves. When you place a market order, you won’t specify a price that you’d like your order to execute. Your broker will fill the order as soon as it’s possible to do so. Market orders give you less control over what you pay per share of AMC.
A stop-loss order is an order placed with a broker to buy or sell a stock once the stock reaches a certain price. This order can limit your loss on a security position.
For example, setting a stop-loss order at 10% below the price at which you bought AMC stock will limit your loss to 10%.
A stop-limit order combines a limit order and a stop-loss order. When you place a stop-limit order, you specify both an upper limit price and a lower stop price. When you buy AMC, you might set a limit price of $190 and a stop price of $185.
Let’s say the cost rises above $190. Your stop-limit order converts to a limit order and your broker fills the order as long as you can purchase AMC for $190 a share or less. If the price rises above $190, your broker will stop filling the order.
Execute Your Trade
Execution is simply the completion of a buy or sell order for a security. But it’s important to remember the execution of an order occurs when it is filled, not when you — the investor — place it.
AMC Stock History
AMC Entertainment Inc. delivers the highest revenue-producing and entertaining movie-going experience in the world through its American Multi-Cinema Inc. subsidiary. A few highlights:
- AMC became incorporated in 1968 but the business began in 1920 by a struggling actor working for a traveling tent show.
- During the 1920s and 1930s, a few theatres opened in the Kansas City area.
- In 1999, AMC ran 200 theaters with 2,800 screens in 23 states.
- AMC generated annual ticket sales of nearly $1,030 million in 2000.
AMC Entertainment Inc. is now the largest movie theater chain in the world and just raised $917 million of new equity and debt capital, according to the company’s newest SEC filing. Around $500 million of this fundraising came from new common shares issuance.
Pros to Buying AMC Stock
Shares of AMC Entertainment soared in early 2021. And since December 2020, it has raised more than $900 million in financing. AMC CEO Adam Aron said these funds could support the company well into 2021 — despite the financial losses of the pandemic.
Reddit’s Wall Street Bets has rallied around AMC, and that resulted in the Twitter hashtag #SaveAMC. The Reddit community has drawn attention to turn stock prices around before. Wall Street Bets users played the market and pushed GameStop’s stock up to nearly 3 times its average. The same group has given attention to BlackBerry as well.
Rallies around investments like GameStop and AMC are driven by individual retail investors. Invest in AMC, and you could be a part of what a Reddit user has dubbed “a war for the redistribution of wealth.”
Cons to Buying AMC Stock
Some experts highlight the short-term hype of AMC stock’s increase. AMC hasn’t had strong revenues and unfortunately, its decline began before COVID-19. AMC stock plunged to around the $2 range in mid-January, then quickly jumped above $3. Why did the stock price jump? It sold debt notes to bring in some capital.
Just last year, AMC Entertainment admitted that it would run out of cash soon and projected to deplete its debt reserves in 2021. Moreover, the company conceded that it might have to consider bankruptcy.
It’s important to consider the reasons AMC’s stock rose — and it’s not due to excellent underlying financials. If you’re in it for the long haul, beware.
Buy AMC Stock Now
AMC is having its moment, but it’s also been around for more than a century. While it’s tough to bet on whether AMC is destined for long-term gain, anything is possible in the markets. Connect with an online brokerage and buy AMC stock today if you want to pocket some short-term success.
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