Replies to post #88257 on AMC Entertainment Holdings Inc (AMC)

[Prudent Capitalist]

Yep. It is going to be extremely difficult for AMC to refinance the huge amount debt ($5.5 Billion) now, and the deferred lease payments are quickly becoming a serious issue. It was a huge mistake for AMC shareholders to deny approval for AMC to sell more shares at the grossly inflated share prices last year to pay down debt, and APES have no one to blame but themselves.

In early 2021, AMC became a darling of individual investors, many of whom refer to themselves as the apes. They helped push AMC's stock price to eye-popping heights through meme-heavy social-media hype, and they came to own more than 80% of the company.

"At first it was a very well-defined and purposeful anti-Wall Street type movement," said Chad Beynon, an analyst at Macquarie Group Ltd., regarding the ape community. "That story is no longer as attractive. After seeing it not working for a few months, there's some sort of fatigue."

AMC, as well as its peers in the cinema business, continue to struggle with getting customers into their theaters as the pandemic drags on. While the film "Spider-Man: No Way Home" was a recent hit for the theater industry, box-office revenue for the latest weekend amounted to a mere $46 million, compared with $123 million the same weekend in 2020, and $104 million in 2019, according to Comscore data.

Since the Covid-19 pandemic began, AMC has stayed alive by a combination of selling new shares, taking on new debt and getting landlords to agree to delay collecting rent payments. But the apes' takeover of AMC has restricted its options for dealing with the debts it took on to get through the worst of the pandemic lockdowns.

Last year, AMC twice failed to win shareholder approval of new equity issuances as apes fretted about dilution, despite Mr. Aron lobbying to allow for more shares to be sold. Now the company isn't able to issue stock to pay down debt, said Michael Pachter, an analyst at Wedbush Securities.

"The shareholders blew that," Mr. Pachter said.