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AMC Entertainment Holdings, Inc., through its subsidiaries, involved in the theatrical exhibition business. The company owns, operates, or has interests in theatres. As of March 17, 2020, it operated approximately 1,000 theatres and 11,000 screens in the United States and internationally. The company was founded in 1920 and is headquartered in Leawood, Kansas. AMC Entertainment Holdings, Inc. is a subsidiary of Dalian Wanda Group Co., Ltd.
AMC is a known consumer brand with a long and proud history but physical retail is dying. Very few physical retailers can maintain profitability and AMC is burdened with nearly 11 billion dollars in debt, negative cash flow and a paltry 92 million dollars in revenue. AMC stock looks cheap compared to 2019 financials, but this is fool’s gold.
If they had a much smaller debt load I could see an argument for holding some AMC stock and hoping for a turnaround but they are burning 300 million in cash a quarter and could be out of cash with no way to make debt payments by this summer. That is a recipe for bankruptcy which would wipe out any modest hope of shareholder value.
AMC could also dilute shareholder’s by issuing shares but thus far they have shown no desire to do that. Much like someone slowly bleeding to death who has accepted they are gone and doesn’t see a point in prolonging their suffering this seems to be the attitude of AMC management. They have accepted bankruptcy is coming and I feel terrible for anyone trying to convince themselves AMC stock still has value.