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Not to throw water on anyone's parade, here is what one of the Bigs (Seeking Alpha) guys published about AMC. Either he is running scared or he is a stooge!

 

AMC: Bulls Are On The Wrong Side Of The Trade This Time

Apr. 24, 2021 3:29 AM ETAMC Entertainment Holdings, Inc. (AMC)127 Comments10 Likes

Summary

  • Despite being miraculously saved by public investors, AMC Entertainment still faces the risk of bankruptcy next year.
  • In addition, the weak environment, poor performance in pre-COVID-19 days, and an overleveraged balance sheet are making us believe that the growth of its stock is limited at this stage.
  • We believe that it’s better to avoid AMC, as the short squeeze is likely to be over.
  • Looking for a helping hand in the market? Members of Best Short Ideas get exclusive ideas and guidance to navigate any climate.  Learn More »

 

 

New York during the COVID-19 emergency. Photo by Massimo Giachetti/iStock Editorial via Getty Images

 

Despite being miraculously saved by public investors, AMC Entertainment (AMC) still faces the risk of bankruptcy next year. While its major shareholders such as Silver Lake and Wanda Group were able to cash out and sell their stakes in the business at a profit, there’s no guarantee that public investors will be able to do the same thing if AMC runs out of cash later on. The weak environment, poor performance in pre-COVID-19 days, and an overleveraged balance sheet are making us believe that the growth of its stock is limited at this stage, as the short squeeze is likely to be over.

 

Bankruptcy is Still on the Table

AMC is down over 40% since our last article on the company came out in late January and we believe that the stock has even more room to fall. The major problem of AMC is that it had entered the pandemic in a weak financial state and it will exit it in an even worse shape than before. Right now data shows that the company’s 3-year revenue CAGR is -37.46%, while its 3-year stock performance is -42.47%, and it’s unlikely that the situation will improve in the next couple of years.

The reality is that AMC was on its way to bankruptcy, but it was able to extend its lifetime thanks to the help of public investors, who began to prop up its share price at the beginning of this year and executed a short squeeze, which pushed the company’s stock to new highs. However, while AMC was able to avoid insolvency, the major winners of this appreciation were big investors such as Silver Lake and Wanda Group, which were able to quickly profit from such a move and decrease their stakes in the company. As a result, public investors now own over 80% of the company’s stock, while institutions and the company’s insiders hold only ~10% and ~0.5% of the total equity in the company, respectively.

48206420_16191724616004_rId9_thumb.jpg

Chart: Seeking Alpha

The company’s latest earnings results show that the business is far away from returning to normalcy. In Q4 its revenues of $162.5 million were down 88.8% Y/Y, as its receipts and attendance were down 89% Y/Y and 91.3% Y/Y, respectively. On top of that, its adjusted EBITDA for the period was -$327.5 million against $269.1 million a year ago, while its net loss in Q4 was -$946.1 million against a net loss of only -$13.5 million a year ago.

Due to such a poor performance, AMC was able to survive solely through secondary offerings, which diluted its shareholders by around 330% in recent quarters. The company was able to raise ~$2.2 billion since the beginning of the pandemic, out of which ~$1 billion was raised in the last few months when its stock began to appreciate on heavy volume. However, that liquidity might not be enough in the long-term to avoid bankruptcy, since in 2020 alone the business had over $300 in annual interest expenses and by the end of the year, it had over $5 billion in debt. While during normal times, AMC would’ve been able to service that debt and deleverage its balance sheet by driving sales and generating positive FCF, it’s unlikely that it’ll be able to do so in the current environment since its business in the next couple of years is projected to not to return to its 2019 levels.

 

48206420_16191724616004_rId13.pngSource: Seeking Alpha

AMC will not be able to return to its pre-COVID-19 levels anytime soon simply due to the fact that a large group of consumers will now prefer to watch movies on their big screens at home rather than go to an enclosed public space and risk getting sick. Considering that some major production companies recently decided to distribute their movies via streaming platforms the same day those movies are released in cinemas, it’s hard to imagine how the overall theater business will be able to recover in the foreseeable future. With such a change in consumer habits, it’s unlikely that AMC will be able to improve its top-line performance and generate positive FCF to decrease its high debt burden.

Another downside of AMC is that there’s still a possibility that it could become insolvent next year. In its latest 10-K filing the company said that its capacity needs to be at ~90% of pre-COVID-19 levels in the next few quarters in order to not run out of cash next year. Considering that the street expects the company to perform poorly in the near term, it’s unlikely that AMC will be able to reach such capacity levels and improve its operational performance, so there’s every reason to believe that it’ll be looking for additional liquidity. If AMC is unable to find enough liquidity, then the restructuring of its debt will take place. Here’s what the company has stated in its 10-K filing:

If such additional liquidity were not realized or insufficient we likely would seek an in-court or out-of-court restructuring of our liabilities, and in the event of such future liquidation or bankruptcy proceeding, holders of our common stock and other securities would likely suffer a total loss of their investment.

One way AMC could raise liquidity is by issuing new shares and continuing to dilute its shareholders as it did in the last few quarters. Recently it was announced that the management of AMC will ask its investors to authorize it to issue additional 500 million shares during the upcoming annual investors' conference in May. While the company’s CEO pledged not to offer those shares in 2021, there’s every reason to believe that a dilution will happen next year since the overall business is not going to recover in the next few months. However, the problem is that public investors now control most of the company’s shares, so there’s a risk that the majority of them decide to vote against the authorization to issue new shares in order to prevent a depreciation of the company’s stock. On top of that, it will be significantly harder for public investors to execute another short squeeze with so many new shares outstanding.

 

Considering all of this, we believe that the bankruptcy of AMC is still on the table, as the company might be unable to improve its top-line performance and generate positive FCF to service its debt in the foreseeable future. With a street price target of only $4.44 per share, we believe that AMC’s upside at this stage is limited and investing in the company’s shares is not worth it due to the high opportunity cost and poor risk/reward ratio.

48206420_16191724616004_rId18.png

Source: Seeking Alpha

Liked the article? Bears of Wall Street is happy to announce that you can gain access to the growing library of similar articles with a bearish sentiment by subscribing to the #1 Seeking Alpha marketplace service for short ideas called Best Short Ideas. If you like to enter the world of short selling and learn more about unconventional stock market strategies, then give the service a try and opt for the FREE 14-day trial today! More details here.

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7 minutes ago, md11fr8dawg said:

Not to throw water on anyone's parade, here is what one of the Bigs (Seeking Alpha) guys published about AMC. Either he is running scared or he is a stooge!

 

AMC: Bulls Are On The Wrong Side Of The Trade This Time

Apr. 24, 2021 3:29 AM ETAMC Entertainment Holdings, Inc. (AMC)127 Comments10 Likes

Summary

  • Despite being miraculously saved by public investors, AMC Entertainment still faces the risk of bankruptcy next year.
  • In addition, the weak environment, poor performance in pre-COVID-19 days, and an overleveraged balance sheet are making us believe that the growth of its stock is limited at this stage.
  • We believe that it’s better to avoid AMC, as the short squeeze is likely to be over.
  • Looking for a helping hand in the market? Members of Best Short Ideas get exclusive ideas and guidance to navigate any climate.  Learn More »

 

New York during the COVID-19 emergency. Photo by Massimo Giachetti/iStock Editorial via Getty Images

 

Despite being miraculously saved by public investors, AMC Entertainment (AMC) still faces the risk of bankruptcy next year. While its major shareholders such as Silver Lake and Wanda Group were able to cash out and sell their stakes in the business at a profit, there’s no guarantee that public investors will be able to do the same thing if AMC runs out of cash later on. The weak environment, poor performance in pre-COVID-19 days, and an overleveraged balance sheet are making us believe that the growth of its stock is limited at this stage, as the short squeeze is likely to be over.

 

Bankruptcy is Still on the Table

AMC is down over 40% since our last article on the company came out in late January and we believe that the stock has even more room to fall. The major problem of AMC is that it had entered the pandemic in a weak financial state and it will exit it in an even worse shape than before. Right now data shows that the company’s 3-year revenue CAGR is -37.46%, while its 3-year stock performance is -42.47%, and it’s unlikely that the situation will improve in the next couple of years.

The reality is that AMC was on its way to bankruptcy, but it was able to extend its lifetime thanks to the help of public investors, who began to prop up its share price at the beginning of this year and executed a short squeeze, which pushed the company’s stock to new highs. However, while AMC was able to avoid insolvency, the major winners of this appreciation were big investors such as Silver Lake and Wanda Group, which were able to quickly profit from such a move and decrease their stakes in the company. As a result, public investors now own over 80% of the company’s stock, while institutions and the company’s insiders hold only ~10% and ~0.5% of the total equity in the company, respectively.

48206420_16191724616004_rId9_thumb.jpg

Chart: Seeking Alpha

The company’s latest earnings results show that the business is far away from returning to normalcy. In Q4 its revenues of $162.5 million were down 88.8% Y/Y, as its receipts and attendance were down 89% Y/Y and 91.3% Y/Y, respectively. On top of that, its adjusted EBITDA for the period was -$327.5 million against $269.1 million a year ago, while its net loss in Q4 was -$946.1 million against a net loss of only -$13.5 million a year ago.

Due to such a poor performance, AMC was able to survive solely through secondary offerings, which diluted its shareholders by around 330% in recent quarters. The company was able to raise ~$2.2 billion since the beginning of the pandemic, out of which ~$1 billion was raised in the last few months when its stock began to appreciate on heavy volume. However, that liquidity might not be enough in the long-term to avoid bankruptcy, since in 2020 alone the business had over $300 in annual interest expenses and by the end of the year, it had over $5 billion in debt. While during normal times, AMC would’ve been able to service that debt and deleverage its balance sheet by driving sales and generating positive FCF, it’s unlikely that it’ll be able to do so in the current environment since its business in the next couple of years is projected to not to return to its 2019 levels.

 

48206420_16191724616004_rId13.pngSource: Seeking Alpha

AMC will not be able to return to its pre-COVID-19 levels anytime soon simply due to the fact that a large group of consumers will now prefer to watch movies on their big screens at home rather than go to an enclosed public space and risk getting sick. Considering that some major production companies recently decided to distribute their movies via streaming platforms the same day those movies are released in cinemas, it’s hard to imagine how the overall theater business will be able to recover in the foreseeable future. With such a change in consumer habits, it’s unlikely that AMC will be able to improve its top-line performance and generate positive FCF to decrease its high debt burden.

Another downside of AMC is that there’s still a possibility that it could become insolvent next year. In its latest 10-K filing the company said that its capacity needs to be at ~90% of pre-COVID-19 levels in the next few quarters in order to not run out of cash next year. Considering that the street expects the company to perform poorly in the near term, it’s unlikely that AMC will be able to reach such capacity levels and improve its operational performance, so there’s every reason to believe that it’ll be looking for additional liquidity. If AMC is unable to find enough liquidity, then the restructuring of its debt will take place. Here’s what the company has stated in its 10-K filing:

If such additional liquidity were not realized or insufficient we likely would seek an in-court or out-of-court restructuring of our liabilities, and in the event of such future liquidation or bankruptcy proceeding, holders of our common stock and other securities would likely suffer a total loss of their investment.

One way AMC could raise liquidity is by issuing new shares and continuing to dilute its shareholders as it did in the last few quarters. Recently it was announced that the management of AMC will ask its investors to authorize it to issue additional 500 million shares during the upcoming annual investors' conference in May. While the company’s CEO pledged not to offer those shares in 2021, there’s every reason to believe that a dilution will happen next year since the overall business is not going to recover in the next few months. However, the problem is that public investors now control most of the company’s shares, so there’s a risk that the majority of them decide to vote against the authorization to issue new shares in order to prevent a depreciation of the company’s stock. On top of that, it will be significantly harder for public investors to execute another short squeeze with so many new shares outstanding.

 

Considering all of this, we believe that the bankruptcy of AMC is still on the table, as the company might be unable to improve its top-line performance and generate positive FCF to service its debt in the foreseeable future. With a street price target of only $4.44 per share, we believe that AMC’s upside at this stage is limited and investing in the company’s shares is not worth it due to the high opportunity cost and poor risk/reward ratio.

48206420_16191724616004_rId18.png

Source: Seeking Alpha

Liked the article? Bears of Wall Street is happy to announce that you can gain access to the growing library of similar articles with a bearish sentiment by subscribing to the #1 Seeking Alpha marketplace service for short ideas called Best Short Ideas. If you like to enter the world of short selling and learn more about unconventional stock market strategies, then give the service a try and opt for the FREE 14-day trial today! More details here.

This is the perfect example of being a SHILL for the Hedgies. Seeking Alpha is bought and paid for and will be going down with the ship. They have to write these articles. The points are lame, if not wrong and knowingly false altogether. AMC has a billion and half dollars in liquidity, enough they say to last them through the end of 2022 if all of their doors are closed. People are going to flood the theaters especially with all the big blockbusters coming out. This FUD isn't even a good try.

The Short Squeeze hasn't even begun!  How can it be over?  LOL!

Desperate Crimes call for Desperate Hedgers!

This just makes me want to BUY BUY BUY!!!

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1 minute ago, md11fr8dawg said:

I know, I read that and I thought what a lame attempt to justify selling. They NEVER give you the other side of the story, THEY CAN"T. But I just wanted everyone here to know what's coming in the way of articles and persuasion. And there will be MORE to come. 

They have to. They are going bankrupt bleeding millions everyday. The hedgefunds have lost over a billion and half dollars so far this week alone. They just don't understand what they are up against. A worldwide movement that only costs the APES what they pay for the stock. It doesn't cost us anything to hold. But it is going to cost the Hedgies everything because we hold.

 

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25 minutes ago, md11fr8dawg said:

Not to throw water on anyone's parade, here is what one of the Bigs (Seeking Alpha) guys published about AMC. Either he is running scared or he is a stooge!

 

AMC: Bulls Are On The Wrong Side Of The Trade This Time

Apr. 24, 2021 3:29 AM ETAMC Entertainment Holdings, Inc. (AMC)127 Comments10 Likes

Summary

  • Despite being miraculously saved by public investors, AMC Entertainment still faces the risk of bankruptcy next year.
  • In addition, the weak environment, poor performance in pre-COVID-19 days, and an overleveraged balance sheet are making us believe that the growth of its stock is limited at this stage.
  • We believe that it’s better to avoid AMC, as the short squeeze is likely to be over.
  • Looking for a helping hand in the market? Members of Best Short Ideas get exclusive ideas and guidance to navigate any climate.  Learn More »

 

New York during the COVID-19 emergency. Photo by Massimo Giachetti/iStock Editorial via Getty Images

 

Despite being miraculously saved by public investors, AMC Entertainment (AMC) still faces the risk of bankruptcy next year. While its major shareholders such as Silver Lake and Wanda Group were able to cash out and sell their stakes in the business at a profit, there’s no guarantee that public investors will be able to do the same thing if AMC runs out of cash later on. The weak environment, poor performance in pre-COVID-19 days, and an overleveraged balance sheet are making us believe that the growth of its stock is limited at this stage, as the short squeeze is likely to be over.

 

Bankruptcy is Still on the Table

AMC is down over 40% since our last article on the company came out in late January and we believe that the stock has even more room to fall. The major problem of AMC is that it had entered the pandemic in a weak financial state and it will exit it in an even worse shape than before. Right now data shows that the company’s 3-year revenue CAGR is -37.46%, while its 3-year stock performance is -42.47%, and it’s unlikely that the situation will improve in the next couple of years.

The reality is that AMC was on its way to bankruptcy, but it was able to extend its lifetime thanks to the help of public investors, who began to prop up its share price at the beginning of this year and executed a short squeeze, which pushed the company’s stock to new highs. However, while AMC was able to avoid insolvency, the major winners of this appreciation were big investors such as Silver Lake and Wanda Group, which were able to quickly profit from such a move and decrease their stakes in the company. As a result, public investors now own over 80% of the company’s stock, while institutions and the company’s insiders hold only ~10% and ~0.5% of the total equity in the company, respectively.

48206420_16191724616004_rId9_thumb.jpg

Chart: Seeking Alpha

The company’s latest earnings results show that the business is far away from returning to normalcy. In Q4 its revenues of $162.5 million were down 88.8% Y/Y, as its receipts and attendance were down 89% Y/Y and 91.3% Y/Y, respectively. On top of that, its adjusted EBITDA for the period was -$327.5 million against $269.1 million a year ago, while its net loss in Q4 was -$946.1 million against a net loss of only -$13.5 million a year ago.

Due to such a poor performance, AMC was able to survive solely through secondary offerings, which diluted its shareholders by around 330% in recent quarters. The company was able to raise ~$2.2 billion since the beginning of the pandemic, out of which ~$1 billion was raised in the last few months when its stock began to appreciate on heavy volume. However, that liquidity might not be enough in the long-term to avoid bankruptcy, since in 2020 alone the business had over $300 in annual interest expenses and by the end of the year, it had over $5 billion in debt. While during normal times, AMC would’ve been able to service that debt and deleverage its balance sheet by driving sales and generating positive FCF, it’s unlikely that it’ll be able to do so in the current environment since its business in the next couple of years is projected to not to return to its 2019 levels.

 

48206420_16191724616004_rId13.pngSource: Seeking Alpha

AMC will not be able to return to its pre-COVID-19 levels anytime soon simply due to the fact that a large group of consumers will now prefer to watch movies on their big screens at home rather than go to an enclosed public space and risk getting sick. Considering that some major production companies recently decided to distribute their movies via streaming platforms the same day those movies are released in cinemas, it’s hard to imagine how the overall theater business will be able to recover in the foreseeable future. With such a change in consumer habits, it’s unlikely that AMC will be able to improve its top-line performance and generate positive FCF to decrease its high debt burden.

Another downside of AMC is that there’s still a possibility that it could become insolvent next year. In its latest 10-K filing the company said that its capacity needs to be at ~90% of pre-COVID-19 levels in the next few quarters in order to not run out of cash next year. Considering that the street expects the company to perform poorly in the near term, it’s unlikely that AMC will be able to reach such capacity levels and improve its operational performance, so there’s every reason to believe that it’ll be looking for additional liquidity. If AMC is unable to find enough liquidity, then the restructuring of its debt will take place. Here’s what the company has stated in its 10-K filing:

If such additional liquidity were not realized or insufficient we likely would seek an in-court or out-of-court restructuring of our liabilities, and in the event of such future liquidation or bankruptcy proceeding, holders of our common stock and other securities would likely suffer a total loss of their investment.

One way AMC could raise liquidity is by issuing new shares and continuing to dilute its shareholders as it did in the last few quarters. Recently it was announced that the management of AMC will ask its investors to authorize it to issue additional 500 million shares during the upcoming annual investors' conference in May. While the company’s CEO pledged not to offer those shares in 2021, there’s every reason to believe that a dilution will happen next year since the overall business is not going to recover in the next few months. However, the problem is that public investors now control most of the company’s shares, so there’s a risk that the majority of them decide to vote against the authorization to issue new shares in order to prevent a depreciation of the company’s stock. On top of that, it will be significantly harder for public investors to execute another short squeeze with so many new shares outstanding.

 

Considering all of this, we believe that the bankruptcy of AMC is still on the table, as the company might be unable to improve its top-line performance and generate positive FCF to service its debt in the foreseeable future. With a street price target of only $4.44 per share, we believe that AMC’s upside at this stage is limited and investing in the company’s shares is not worth it due to the high opportunity cost and poor risk/reward ratio.

48206420_16191724616004_rId18.png

Source: Seeking Alpha

Liked the article? Bears of Wall Street is happy to announce that you can gain access to the growing library of similar articles with a bearish sentiment by subscribing to the #1 Seeking Alpha marketplace service for short ideas called Best Short Ideas. If you like to enter the world of short selling and learn more about unconventional stock market strategies, then give the service a try and opt for the FREE 14-day trial today! More details here.

Who really knows? But, the numbers are also out there to show some nefarious, but legal, hedgefunders who knowingly speculate on shares that do not even exist creating a sort of vacuum to allow them to suck out all of the money from legitimate companies.

Kudos to all the younger financial analysts exposing this legal loophole that only the rich have benefitted from for decades.

 

As a newly minted 'Ape' in the rebel army exploiting these Naked Short Squeezes to make money while sticking it to these hedge funds, I read your article like pro-Iranian, Iraqi Shia propaganda that we see a lot about the dinar, etc., but I do appreciate you sharing.

 

Cheers!

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Not only is this a ONCE opportunity for a historic transfer of wealth for holders, it is a ONCE opportunity to expose the corruption in financial markets and force reform so that they are truly free and fair for all participants, not just market big money market manipulators. The market will take a hit in the short term. But in the long term it will rebound, better, stronger, and hopefully fairer for EVERYONE.

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And it hasn't even started squeezing yet. Ha! You'll know the squeeze when it shoots up hundreds and thousands of dollars then drops like a rock and runs up even higher all within a day. And this happening over several days to a week or two.

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FWIW, from a  friend! I think they are gonna try to drop it towards the $15-$18 range. They know it's a long weekend, they know that would leave a bad taste in some people's mouths. They want it to eat at us and bring down morale for the long weekend. Then Tuesday maybe it would wait to go up a little longer to try to force the people out early, but after that I think the gains get real!

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