re: Holding AMC Thread- Diamond hands unite

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but hell a good summer this year could put them back to a 15-20 buck share and I'll buy these at 7-8 all day.

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In the third quarter, AMC had an average of 107 million shares outstanding. By the end of October, that had reached 137 million, and since then the company has sold about 260 million new shares to avoid bankruptcy, bringing its shares outstanding to approximately 400 million. In other words, shareholders who have held their positions over the last six months now own just one-quarter of what they did in the third quarter. While that dilution is a better outcome for shareholders than bankruptcy, the company now must generate four times the profit it had made before the pandemic for those shares to be worth the same.

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Even before the pandemic, AMC was bloated with debt. The company finished 2019 with $4.7 billion in corporate borrowings and just $265 million in cash. As of the end of the third quarter, that debt had ballooned to $5.8 billion. The company has added to its borrowing since then, and much of the recent loans have come at interest rates as high as 15%, a sign of both the company's poor creditworthiness and how difficult it will be for AMC to escape this level of debt even when the crisis is over. In 2020, it was on track to pay $311 million in interest expense, which exceeds its peak operating income in a single year. From a financial standpoint, AMC has put itself in a hole it can't get out of, as it won't be able to turn a profit with so much interest to pay.

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