Will AMC Theaters (AMC) Go Bankrupt?

[View in browser]( [The Spill Logo] BROUGHT TO YOU BY: [Logo]( Proprietary Data Insights Retail Top Entertainment Stock Searches in the Last Month Rank Ticker Name Searches #1 [AMC]( AMC Entertainment 90,798 #2 [LYV]( Live Nation Entertainment 6,579 #3 [DLPN]( Dolphin Entertainment 1,979 #4 [CNK]( Cinemark 1,888 #5 [MCS]( Marcus 1,398 #ad [Alarm Bells: Seniors' Savings at Risk]( Brought to you by [Porter Stansberry]( [Gates-backed company holds the future of AI]( [Porter Stansberry - Gates-backed company holds the future of AI]( $750 million… five years… all for this one new AI technology Bill Gates is making his next big bet. And this time, it’s with artificial intelligence. Over the last several years, Gates has quietly invested more than $750 million into this technology. And he’s not the only one. Warren Buffett, Peter Thiel, Jeff Bezos, and others are in on it too. [In this new exposé, Porter Stansberry shares all the details.]( Will AMC Theaters (AMC) Go Bankrupt? Before the pandemic, AMC Theaters (AMC) generated almost $600 million in cash from operations. Now, it burns through $200 million in a year. The beleaguered company may be a meme stock fan favorite, as evidenced by the incredibly high retail investor search volume from our TrackStar database. Yet, we believe the company won’t exist in its current form within the next 3-5 years. Here’s why. AMC Theaters’ Business Movie theaters have been the heart of American entertainment since the birth of the motion picture. The business has changed over the years. Drive-in theaters have died off. Auditoriums now come with premium seating and concessions. Yet, like most brick-and-mortar industries, the move online, in this case to streaming, has put the industry on a path from which it may never recover. AMC Theaters operates over 10,000 screens and almost 900 theaters across the U.S. and globally. While it’s still the largest chain in the U.S., AMC continues to shrink in size. [Statement] [Source: AMC Theaters Q1 2024 Press Release]( Streaming has taken a huge bite out of the company’s sales and attendance, which never bounced back from the pandemic. Financials [Finanxials] Source: Stock Analysis AMC’s biggest problem is its cash flow. Other than a quarter here or there, the company burns more money than it brings in, forcing it to rely on debt and equity issuances. Shares have already been substantially diluted with total shares outstanding going from 10 million in 2019 to 263 million in the latest report. Total debt sits just shy of $9 billion while onhand cash is just $624 million. With a burn rate of over $200 million annually, the company has fewer than three years to turn things around or raise capital. Valuation [Valuation] Source: Seeking Alpha Here’s the thing, though…not all movie theaters are failing. Marcus Entertainment (MCS) and Cinemark (CNK) both generate cash from operations. And neither saw debt explode nor had to issue common stock just to stay afloat. In fact, both trade at fairly cheap price-to-cash multiples and even still pay dividends. Growth [Growth] Source: Seeking Alpha After bouncing back from the pandemic, most theaters are forecasting more tepid sales increases in 2024. Growth is necessary to survive when you’re dealing with fixed-cost movie theaters. Yet, AMC can’t seem to do it profitably. Profitability [Profit] Source: Seeking Alpha AMC’s gross margins are abysmal. This translates directly to negative net income margins and cash flow, which neither Cinemark nor Marcus faces. In fact, Dolphin Entertainment (DLPN) is the only other company on this list besides AMC that burns through cash. [Buy this Fund TODAY for 10.5% Monthly Dividends]( One of my favorite income plays right now is an under-the-radar fund that pays an incredible 10.5% monthly dividend. I'm so excited about this fund that I've made it a core holding in my "8% Monthly Payer" portfolio - an easy-to-buy collection of stocks and funds that could hand you $3,330+ in dividend payouts every single month! [Click here to learn more.]([Ad] Our Opinion 0/10 AMC is a poorly managed company in a tailspin. The heavy debt it took on during the pandemic is effectively putting the company’s cash flow in the red. Cinemark and Marcus Entertainment didn’t have this problem. So, if we’re going to invest in a movie theater chain, it’s not going to be the one on life support with three years left to live. 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