2024-03-11 22:18:36 ET
Summary
- AMC continues to sell a massive number of additional shares to raise needed cash and may eventually hit the authorized share limit again.
- Management stated that there is a risk of liquidation or bankruptcy in the latest 10-K if they can't restructure their debt.
- Retail traders continue to buy AMC stock, which enables the large stock sales by the company because they do not understand dilution.
- A Ch.11 bankruptcy plan could equitize debt to allow AMC to continue to operate, but bankruptcy might wipe out shareholders.
AMC Entertainment Holdings ( AMC ) has been able to kick the bankruptcy can down the street for the last four years by selling more and more stock, but eventually that can could get kicked enough that it falls apart and AMC is forced into a Ch.11 bankruptcy filing. AMC has lost a staggering $7.23 billion over the last four years, and it is highly likely that they will report a large loss for 2024. With a very high debt load and a continued negative cash-flow because of the troubles facing the movie industry, a potential Ch.11 filing by AMC is not off the table. I rate AMC common stock a sell....
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AMC Entertainment: Chapter 11 Bankruptcy Is Not Completely Off The Table