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1 Big Red Flag in AMC’s Earnings Report
The Industry Mar 12, 2021
Image source: AMC Entertainment.
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AMC Entertainment ( NYSE:AMC ) has made it through the darkest days of the pandemic, and it will come out on the other side.
The company reaffirmed that in its fourth-quarter earnings report, saying that it was reopening theaters in major markets like New York and Los Angeles, even as it is burning around $100 million in cash every month.
Optimism about the reopening later this year along with a likely boost from Reddit traders was enough to lift the stock after its earnings report as shares traded up as much as 10% on Thursday morning.
However, the results shed new light on the company’s troubled financial situation coming out of the pandemic, as it’s been forced to raise billions of dollars during the crisis to stay alive. It’s added $1 billion in high-interest debt to its balance sheet with total corporate borrowings now clocking in at $5.7 billion, but there’s a bigger concern for investors here, and its already bloated debt burden helps explain it.
Massive share dilution
AMC finished 2019 with 103 million shares. By the end of the third quarter, that share count had only increased modestly to an average of 107.7 […]
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