AMC Entertainment Holdings Inc (AMC)

[Major Profits]

Is AMC's future this bleak?

https://www.fool.com/investing/2021/03/23/amc-entertainment-has-a-new-price-target-001/

Greenfield's thesis as to why AMC will lose nearly 100% of its value over the next year hits on a number of points. To begin with, he believes that AMC is over-levered and its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) estimates are too rosy. Greenfield notes that the company is valued at 8 times debt-to-EBITDA, and believes it's unlikely the company will surpass $600 million in adjusted EBITDA in 2022. With little to no free cash flow, he doesn't believe AMC will be able to service its growing debt load.

Furthermore, Greenfield is skeptical about AMC's audience returning anytime soon. He notes that pandemic fears may persist and keep people away from theaters.

...As much as I view bankruptcy as a legitimate possibility for AMC and agree with much of Greenfield's analysis, it's unlikely that AMC reaches this price target within the next 12 months. The reason is simple: AMC has the power to sell common stock and potentially even issue more debt capital to raise money, should the need arise.

Dilution sucks.

GLTA