Options Traders Blast AMC Entertainment Stock on Special Dividend

Written by waploaded

Movie theater names reported worse-than-expected second-quarter losses

AMC Entertainment Holdings Inc. (NYSE: AMC) Yesterday posted a worse-than-expected second-quarter loss of 24 cents per share, while its revenue came in slightly above estimates. To amend, the movie theater concern declared a special dividend for each AMC common share in the form of one preferred share. As a result, retail trader Preferred expects approximately 517 million preferred shares to be listed on the New York Stock Exchange (NYSE) under the symbol “APE”.

Nevertheless, the equity was last seen trading down 6% at $17.54. Shares’ latest rally yesterday lost steam at the $20 level, but the security still remains at its best level since early April. AMC Entertainment Stock Today is testing the $16 level, and could add to its 36.7% year-on-year loss.

Analysts are highly pessimistic towards AMC, with all six in coverage calling it a “hold” or worse. Despite a 14.9% decline in short interest over the last two reporting periods, equities are still very low. In fact, 96.16 million shares were sold short, which is 18.7% of the stock’s available float.

Meanwhile, option pits have displayed a clear preference for calls. That’s according to the securities’ 50-day call/put volume ratio of 3.05 on the International Securities Exchange (ISE), the Cboe Options Exchange (CBOE), and the NASDAQ OMX PHLX (PHLX), which all sit in excess of the 1% reading. its annual limit. This means that long calls are being picked up at a much faster rate than usual.

Total options volume today is trading at three times the intraday average, including 69,000 calls and 33,000 puts so far. The most popular is the 8/5 17.50-strike call, where new positions are being opened, followed by the 20-strike call in that series, which expires when both are closed.