Should I Buy AMC (AMC)? Finance YouTuber Analysis

The YouTuber strongly advises staying away from AMC, citing its long history as a terrible company with a dying business model. He criticizes management's decisions, which he believes have harmed retail investors, and points to consistently eroding fundamentals, making it a losing long-term bet unless major changes occur.

“This stock has been on this list for years now, and I get blasted by folks. It's gotten less and less and less every single year as the years click on. But I get blasted down in the comments from somebody who thinks the super gamma short mega squeeze of all time is coming and $100,000 is right around the corner and this management team is great.”

The YouTuber strongly advises avoiding AMC, citing abysmal management, dilution of shareholders, and a lack of fundamental improvement despite social media hype. He expresses a desire for the company to succeed but sees no current signs of a financial turnaround.

“For me, it's one I'm staying far far away from. Saved a lot of money staying away from it all these years, and I'm going to continue to do so despite the fact I'm actually rooting for them.”

The YouTuber strongly advises against AMC, labeling it a 'dump it' due to its association with Wall Street Bets and meme stock trading. As a long-term buy-and-hold investor, he states it does not fit his criteria and views it as a speculative trade rather than a sound investment.

“you guys know for me it's a dump it I don't want anything to do with any of this Wall Street bets type stuff uh it's trading um and again I'm a long-term Buy and Hold investor so it's just not something that fits into my cred criteria there”

The analyst advises avoiding AMC due to its significant debt burden of $4.2 billion and $3.8 billion in lease liabilities, coupled with negative cash flow from operations. Despite some recent box office recovery, the long-term trend of declining movie attendance and the shift to streaming services suggest that AMC's revenue will not return to pre-pandemic levels, making it difficult to service its fixed costs and debt.

“I simply don't see that and that's why I'm staying away from AMC.”

The analyst identifies AMC as a surprising beneficiary, noting that Taylor Swift distributed her Eras Tour movie directly through AMC's distribution arm, AMC Theatres Distribution. This move cut out traditional studios, leading to huge success and demonstrating AMC's continued importance as a distribution channel for major content creators.

“The Taylor Swift AOS tour movie came out to huge success but again Swift didn't go through the traditional Studio channels she actually distributed it herself through AMC.”

Travis Hoium advises avoiding AMC Entertainment, citing its significant debt of $10 billion against a market cap under $2 billion and negative free cash flow. He argues that declining revenue and consumer behavior shifts towards home viewing make a turnaround unlikely, as the company's fixed costs and low gross margins mean it needs substantial revenue growth to become profitable again.

“this stock is down but it's also one that I would not be betting on recovering”

The analyst advises against holding AMC shares long-term, suggesting a switch to APE shares instead. He highlights the potential for significant dilution from the issuance of APE shares, which management can use to raise capital, and expresses concerns about the long-term viability and profitability of the theater business itself, especially given the weak operational footing of companies like Cineworld.

“I don't really like the theater business long term but this is one of those cases where the headline story is maybe a little bit different than what's actually going on underneath if I were an AMC shareholder what I would be worried about is management issuing a ton of stock just to keep the company afloat”

The YouTuber suggests buying AMC for a short-term trade due to the resurgence of 'Roaring Kitty' and the resulting meme stock rally. He advises taking profits quickly as the rally is expected to be short-lived, setting a price target of $7.

“I got a $7 price Target on AMC and then GameStop could easy go to 35 all right from here it can these things can go a lot higher but I want you guys to do me a favor okay one temper yourself meaning shoot for a realistic Target and get in and get out”

The YouTuber is buying a put option on AMC with a January 2025 expiration, anticipating that the stock will eventually come down significantly. He believes that while some stocks are running up, others will fall, and AMC is one that will decline over the long term.

“I'm buying a put. I'm buying the $5 strike might be even higher $8 strike we'll see where the price is at when I go to do this but I just want you guys to see what strike price I'm choosing and what expiration date I'm choosing and how much time I'm giv myself guys this can pop in a month this can pop in two months 6 months or it might take to the whole year for this to fall down 10% 20% 50% okay but when it does I'm going to win big”

The YouTuber is buying AMC Entertainment shares, or suggests a call spread option strategy, anticipating a short squeeze. Catalysts include the completed stock conversion improving solvency, blockbuster concert films (Taylor Swift, Beyoncé) boosting revenue, and strong Q3 earnings expectations (due November 6th) which could force shorts to cover. He has a cost basis just over $9 and a target of $12-15.

“All this is going to force the shorts to Run for Cover and could start that short squeeze I've got a target of about $12 a share on the stock and it could easily go 15 and even higher.”

The YouTuber bought 6,000 shares of AMC Entertainment, expecting a short squeeze due to the premiere of Taylor Swift's Eras concert film. The film has already booked record pre-sales, leading to an 11% bump in shares, and with limited other major movie releases, it's expected to dominate box office sales.

“AMC entertainment ticker AMC is going to premere its Taylor Swift ays concert film in LA on Wednesday the movie is going to be opening worldwide on Friday and with that Actor Guild still on strike and just few other big movie releases planned this is sure to be the runaway with box office sales for the week the concert has already booked a record 100 million in pre-sales helped drive an 11% bump in the shares on Friday that's why I bought 6,000 shares I'm expecting a short squeeze on this one to one of the four catalysts I'm watching that could send this stock higher.”

The YouTuber is buying AMC shares, anticipating a short squeeze driven by several catalysts. These include improved company finances from a recent share sale, the impending resolution of the Hollywood actors' strike, and the significant revenue potential from the upcoming Taylor Swift concert film. He believes these factors will pressure short sellers to cover their positions, driving the stock price higher.

“I started a position of 2500 shares there on September 6th and have gradually increased that to 6 000 shares.”

The YouTuber is buying AMC shares, believing the stock has hit bottom after a recent share issuance. He anticipates significant upside in the next two months due to upcoming catalysts: the Taylor Swift 'Eras' concert film release on October 13th, which is expected to drive record ticket sales, and the Q3 earnings report on November 6th, which should reflect strong performance from 'Barbenheimer' and provide an optimistic outlook including the Swift film's impact. He also notes that the company's debt issues are being addressed by the share issuance, removing bankruptcy fears, and expects a short squeeze as short sellers cover positions ahead of these positive events.

“I just bought thirty nine thousand dollars in shares yesterday and today I believe this next two months is going to be huge for the stock you're going to see the shorts running for mercy and I'm going to explain why that is in the Catalyst in this video.”

The analyst believes AMC offers an attractive risk-reward profile, with potential for a 50-100% return. Catalysts include the end of Hollywood strikes, multi-day positive price movement reigniting retail interest and potentially triggering a short squeeze, and the company issuing new shares to pay down debt, which would remove existential bankruptcy risk and attract institutional investors. The company's dominant market share in the domestic box office also positions it well for future growth.

“All told right here I think the risk is worth it the risk reward in shares of AMC are very attractive right now you risk maybe 10 20 at the most downside from here as opposed to a 50 100 return to the upside just that back to that 20 fair value Target and Beyond if we get the Reddit investors coming back if we get a short squeeze in the stock.”

The analyst suggests waiting for a pullback in AMC shares before buying, noting that while the conversion of APE shares to common shares was expected and could lead to short-term gains, investor resistance to the approval might cause further declines. He advises caution and patience for a better entry point.

“I would wait for a pullback possibly if you aren't in these ape shares already before once again buying into these preferred shares before the conversion”

The YouTuber prefers the APE preferred shares over AMC common stock, believing the conversion of APE to common shares is only a matter of time and offers higher potential upside. He notes that while AMC could have a strong summer blockbuster season, the APE conversion has been postponed, keeping those shares under distress.

“Now I still do prefer the ape preferred shares here I think conversion has now been postponed for at least a couple of months so it's going to keep those shares those ape shares under uh under under distress but those preferred shares were created with the expressed intent of converting them into into regular shares on a one-to-one basis so I think it's only a matter of time here and that provides the higher potential upside.”

The YouTuber notes AMC's strong revenue growth (over 500% year-over-year) as people return to theaters, suggesting it's growing into its valuation. However, he also highlights that analysts expect negative net income for the next two years and have a 'sell' rating with a price target significantly below the current price, indicating a neutral stance.

“AMC Entertainment is actually growing into this revenue, something you can't say for some of these other meme stocks that are still struggling with revenue growth.”