FORUM INDEX › Join The Discussions › AMC › Very possibly another dumb question, but here goes › Reply To: Very possibly another dumb question, but here goes
MemberJuly 20, 2021 at 1:45 am
Good question and I’ve thought about that too. Just my 2 cents so take it for what it’s worth.
- AMC has already issued a lot of shares this year and raised money. They now have the healthiest balance sheet they have ever had in their 100 year history.
- it’s already been publicized that they could still operate successfully until the end of 2022 from the share issuance alone. Couple that with all the releases coming out this year and they will be fine financially.
- other smaller theaters have already shut down, so that eliminates some competition
- (my personal opinion) with as much money as they have now, and with the possibility of new waves of infections and shutdowns, it would be wise for management to focus on getting movie releases out asap, slim down spending & expenses, pause growing/acquiring new locations, and negotiate their debts. Hypothetically, if they needed to shut down tomorrow and there is no knowing when they can reopen, could their existing business plan hold up as it is without changes? I think they need to operate this year in survival mode, not growth mode. They had less money last year and through many good business moves and miracles, they managed to squeak by (plus all of the apes came in and boosted them). If they have tons more money this year compared to last year and can’t manage it through another shutdown, they have bigger problems.
- at this point, I think the squeeze is still going to happen whether they operate or not (assuming the SEC doesn’t adversely affect it). The shorters have dug themselves into a hole and the only way out is either 1) through bankruptcy of AMC, 2) shake out nervous investors and cover at lower prices, or 3) ultimately cover and get squeezed or wait and get margin called when their risk/margin limits are exceeded. The theater is no longer a factor in this equation AS LONG AS THEY STAY SOLVENT, which we know they will. AMC is technically out of the picture. It is now just a battle between the shareholders and the shorters, and the first to give up loses.