Meme Stocks Are Alive: AMC Entertainment Beats Preliminary Revenue Estimates for Q4 2021 Amid a Recent Surge in Call Buying Activity
AMC Entertainment (NYSE:AMC), the distressed movie theater chain that has become emblematic of the meme stock mania, has hit the proverbial ball out of the park by beating Q4 2021 preliminary revenue estimates.
As per the press statement released moments ago, AMC Entertainment now expects its revenue to compute at $1.17 billion for the three months that ended on the 31st of December 2021. For reference, the company had earned just $162.5 million in Q4 2020 amid the ravages of the COVID-19 pandemic. Crucially, this revenue estimate exceeds consensus expectations of $1.09 billion. Moreover, the company now expects to report a positive adjusted EBITDA that ranges between $146.8 million and $151.8 million. Finally, AMC seems to have generated positive operating cash of $216.5 million during the quarter.
AMC Entertainment shares are trading up over 10 percent in today's pre-market as investors digest the growing probability that the company might turn profitable in the near future. As a part of its turnaround campaign, AMC is betting on NFTs to revive its mojo. The company has launched commemorative NFTs to celebrate the release of the latest Spider-Man iteration on the big screen. Earlier in December, it also announced "I Own AMC" NFTs on the WAX blockchain exclusively for the company's shareholders, entailing various discounts and a host of other benefits.
- Put/call ratio: 0.592, call premium: 13.2 million
- Avg 3d call volume: 279K, Mon: 192K
- Avg 3d put volume: 160K, Mon: 114K
- 5K 🐳: 45% 🐂
- 15K 🐳: 37% 🐂
- 30K 🐳: 22% 🐂
- 🐂 targeting 02-18 expiry, $75 strike
— unusual_whales (@unusual_whales) February 1, 2022
A cursory look at the recent options market activity shows that bulls are winning the tug-of-war. As per a tweet by UnusualWhales, AMC Entertainment's put/call ratio based on yesterday's activity computed at 0.592, indicating a tilt toward call buying. Based on a 3-day average, the put/call ratio computes at 0.573. Given today's stellar preliminary result, we expect this metric to grow progressively bullish.
Nonetheless, on a relatively longer timeframe, AMC Entertainment's option market metrics are not very bullish at the moment. For instance, the stock's 30-day put/call ratio based on open interest is 0.9258, approaching levels last seen during October 2021.
Similarly, AMC Entertainment's 30-day 25-delta implied volatility skew for puts and calls remains in the bearish territory. This is understandable given that the stock is down over 30 percent since the start of 2022. Nonetheless, today's development might mark a seminal shift in the overall sentiment around the stock, possibly allowing bulls to stage a comeback.
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