AUS
NZ
UK
CA
USA
FRA
GER
ESP
ITA
NLD
PRT
SWE
GRC
IND
POL
BRA
ZAF
RUS
CHN
UAE
AMC (NYSE: AMC) stock price has been a trainwreck in the past few years. After peaking at $44 at the height of the meme stock frenzy, the shares have plunged to $4 and are sitting at their lowest level since January 2021. There are elevated risks that the storeyed company could file for bankruptcy in the coming years.
AMC has become a trainwreck
AMC share price sell-off gained steam as the company continued making headlines. The most recent AMC news came from a US courtroom where a judge approved a $129 million payment to shareholders. The company will now execute a 1 to 10 reverse split stock and convert APE into AMC. APE shareholders have sued AMC against this conversion.
The impact of all this is that AMC investors will go through dilution as the number of outstanding shares rises to 169 million. Most importantly, the firm will have the option of diluting its shareholders more by issuing 369 million new shares.
Watch here: https://www.youtube.com/embed/t0izNV8LRpk?feature=oembedThe biggest challenge for AMC is that its debt levels remains elevated and there are some maturities around the corner. AMC’s long-term debt has dropped from $5.69 billion in 2020 to $4.7 billion. It used the meme coin frenzy to raise capital and reduce its debt load.
The challenge is that AMC’s balance sheet has just $450 million in cash, meaning it can handle its payouts in the next two years. The most important debt maturity will come in 2026 when the firm will need to pay $3.1 billion.
The challenge for AMC is that its business is facing significant headwinds, especially the ongoing writers’ strike. This strike will impact the number of movies that are released in 2024.
Still, there are some positives for the company. For one, its revenue is still growing as it reached $1.34 billion in the last quarter. It has also turned profitable, generating over $8 million in net profit.
AMC stock price forecast
The weekly chart shows that the AMC share price has been in a strong bearish trend in the past few years. The shares managed to flip the important support level at $3.84 into a resistance. This price was the lowest level in January, April, and June of this year.
The stock has plunged below the 50-day and 100-day moving averages. Therefore, the shares will likely continue falling in the near term, with the next support to watch will be at $1.13, the lowest level in January 2021. This price is about 60% below the current level.
The post AMC stock price forecast: towards another 65% dip appeared first on Invezz.
