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After much fighting in 2020, AMC Entertainment (NYSE: AMC), although everything is seeing something peaceful this year, recently announced that 99% of its theaters will reopen on March 26 at reduced capacity and can now resume its activities effectively, but that doesn’t mean it doesn’t have any problems. The company would possibly have survived the pandemic, but the long run looks brilliant. Due to reduced operational capacity and customer protection concerns, the company is not operating near its full capacity and is far from profitable. The action of AMC does not seem at this stage.
AMC went bankrupt only 3 months ago, but the company’s monetary capacity doesn’t seem good: it has issued more than $400 million in debt capital and is burning money to survive.
Despite the recent increase in AMC’s actions, I don’t think it’s the long-term typhoon. The pandemic would possibly have triggered the fall of BMI, but that’s not the only problem. Let’s take a closer look at the investment case for AMC Action.
In addition, the same entertainment features can be had at home at a lower price. The competition for transmission is here to stay, even after the end of the pandemic. With several primary theatrical premieres taking full position through the broadcast, many consumers have shown that they are pleased to be able to enjoy the latest edition from the comfort of their homes.
Okay, it’s not the pleasure of enjoying the latest action movie in theaters, but what about fitness risks?
Given the number of features presented through streaming platforms and the selection to watch the latest movie at the time and date of your selection, would you like to stroll through a movie theater?The big screen and the giant scale are dead and the studios are adapting. WarnerMedia has announced that it will release all of its films on HBO Max on the day of its film release. In addition, Walt Disney (NYSE: DIS) also announced that it would do the same on Disney’s streaming platform for some of its films.
To make matters worse, the corporation is very indebted and is already burning $140 million a month, if it continues with the same thing in the coming quarters it may have to raise capital again. Finally, no one knows when AMC Entertainment will be, profitable, for now, we can only speculate.
Regardless of what AMC Entertainment has been in the past, it will never come back. There are so many disorders for the company that it will take at least 3 to 4 years to reduce losses and gain floor in the industry. The company will also have to incur prices to maintain internal protection and hygiene theatres. You already have excessive debt and massive interest rates to pay for the year, which will put more pressure on the flow of money.
The corporate is already suffering and generates profits and the way forward is not easy. Investors deserve to have no high hopes for AMC shares. The existing build-up is the transitoryness and it appears that the CMA will have difficulty filling the seats.
Smart investors don’t buy in the recent exaggeration surrounding stocks. Given the company’s current condition and a market capitalization of $5 billion, the shares appear to be overvalued at $10. It’s more productive to keep them out of your wallet.
Vandita Jadeja is CPA and independent monetary who loves to read and write about actions. Believe in buying and maintaining for long-term profits. His wisdom of words and numbers is helping him write a transparent action analysis.
AMC Entertainment May Not Survive The Storm’s message first gave the impression on InvestorPlace.