AMC Entertainment Holdings Inc (NYSE: AMC) has been volatile like no other this year. Starting 2021 at about $2.0 a share, the stock jumped to a higher of more than $60 at one point and is now back to $33 a share at the time of writing. With the world’s leading cinema chain turned meme stock reporting its quarterly earnings on Monday, investors are wondering if they are in for the next rally up?
Greenfield’s remarks on CNBC’s “Squawk Box”
On CNBC’s “Squawk Box”, Lightshed Partners’ Rich Greenfield warned that AMC Entertainment would fail to meet the debt covenants in Q4 because the cinema chain is still burning money. He referred to the data for the last four weekends and pointed out that the box office was still down nearly 60% compared to the 2019 equivalents (before the pandemic).
“In the last filing AMC had, they said they needed to get back to 85% of the pre-COVID box office by Q4 and Q1. Looking at the numbers, week after week, they’ve been getting worse. Since the delta started picking up, everything has gone down. You can always renegotiate and change things with your lenders. But all things point to the fact that they’re not going to be able to meet those covenants in Q4,” Richfield said.
Greenfield reiterates his sell rating
Greenfield, who has been vocal with his criticism for AMC Entertainment, reiterated his sell rating on Monday. More than 80% of AMC shareholders are retail investors, but the Lightshed Partners co-founder warns that the short-term interest in the stock is starting to fade away, and the “retail investors are selling”.
Revenue from some of the most anticipated movies of 2021, like Black Widow and the Fast Saga, was disappointing as the movie theatres attendees remained scarce. AMC Entertainment’s market cap has shrunk significantly in recent weeks to about $16 billion.
The post Rich Greenfield ahead of AMC’s earnings: “AMC is still burning cash” appeared first on Invezz.
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Wajeeh Khan
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