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Stock, Russell 2000 Index, NYSE:AMC, GameStop, Bloomberg, Stock market index wns debt or equity in AMC: Sources

Yesterday, of course, following the movie theaters operators second share sale. In a week, ceo adam aaron, actually trying to gain support for a plan to issue. Another 25 million shares remember they basically reached their full authorization. They were around 520 million shares that’s all they can issue. Last night he sat down with trey collins, the owner of the trays trades channel on youtube. Take a listen if you are messes with the tool to go, find value, creating opportunities, for instance showers. We can do that if we’re, not armed with this tool, then you’re tying our hands behind our back and you’ll. Make it just that much harder for us to uh land? Some of these attractive opportunities that benefit assault, attractive opportunities? Are the ability to continue to sell stock into a market that’s willing to value this company at some 25 plus billion dollar equity value, uh and yeah? Uh adam aaron wants to just sell as much as he possibly can, because in doing so you had the opportunity to significantly reduce their debt load. I mean they’ve already raised. I think what is it almost 3 billion at this point? Since you know this all began um, they still have, i think, what’s, around 4 billion of net debt. Remember you got to take out cash, but in 5 years time or less they got a lot of debt coming due at the company and don’t forget, of course, morgan. The most important thing is they.

You were talking about this before we started. The show 100 million shares a year ago of this company, now they’re 520 million. Usually your stock goes down when you issue an additional 420 million shares or roughly four times the actual number of shares you had not in this case. This has been such an interesting week, of course, with moderate capital and that potent that sale where they were basically buying stock and selling it very quickly but mudrick, as i pointed out, was really involved in the debt side, and i can’t tell you at this point: They’Re uh from what i’m hearing they’re entirely out moderate. They, they don’t don’t any stock which they didn’t own for very long, but, more importantly, where they really were playing and created a lot of value for their fund holders were the debt securities. They were the first one to really uh this first lien debt, where they took 100 million at a 15 coupon, now they’re out entirely um at modric, so they’re no longer part of this story, but the story goes on yeah. It does, and i mean just to go back to the conversation we’re just having with our market guests. I mean we’re talking about companies that are lawfully valued right now, and we can talk about the fervent nature of the trading and the speculation and uh the role it was just mentioned about the shorts in here and how much that’s actually impacting the dynamic and and Uh, etc, but these are also companies whether it’s, amc or gamestop, that we’re talking about that still exist in the russell 2000 value index they started getting bought into because they were looked at as value plays on the retail side.

So i think that also speaks to this dynamic around value trading and how that is changing carl uh it’s, true and amc alone, guys as a percentage of overall nyse volume. This week is, is mind blowing to say the least, david we’re. Definitely in a mode now where the street’s just giving up uh webb bush today raises their target on amc to 7.50 from 650. They say they could envision as high as 10, depending on how they reduce their debt and create some opportunities. I see b of a today uh stops coverage of bed bath and gamestop, saying don’t, listen to anything. We’Ve said about it. They have stopped trading on the fundamentals yeah, so this was a real morning where the street just shrugged just shrug their shoulders and listen to be fair, adam aaron, in that, in that release yesterday, when they sold shares, said similar things in terms of don’t rely on. You know this current stock price to be anything near what it where it is: uh yeah it does not allow itself to be subjected to traditional securities analysis. I think it’s fair to say if you want to share that, i mean here’s, some of the numbers right. I think their peak operating cash flow was 900 million bucks that was at peak revenue now they’ve taken some costs out, maybe as much as 300 million bucks out. So if they were ever to hit that peak revenue number again, you could argue they might even have as much as 1.

2 billion in operating cash flow, but carl that’s a key question because of all the changes in behavior that have gone on. So how many people really will go to a movie theater? Meanwhile, even if they were to get back to 900 million in operating cash flow, what’s it a six to eight multiple it’s, still a declining business, you can figure out what that’s worth a lot less than the current stock price.

What do you think?

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