$AMC Blockbuster Short Squeeze Brewing
Due to a constant stream of flops, movie theaters have experienced a significant hit. With this in mind, it comes as no surprise that AMC Entertainment Holdings, Inc. (NYSE: AMC) fell more than 50% since March. However, there could be a glimmer of hope with the much anticipated releases of Oppenheimer and Barbie approaching this month. With AMC stock highly shorted at the moment, the possibility of a short squeeze occurring this month is relatively high if both movies are blockbusters as expected.
AMC Fundamentals
As things stand, AMC is the world’s largest theater brand and as such it has the potential to generate a significant quantity of revenue from a single blockbuster. For example, AMC made more than %70 of the box office gross from Avatar: The Way Of Water, and since it made $2.32 billion AMC made more than $1.62 billion. Keeping that in mind, two highly anticipated potential blockbusters are on the horizon.
Pink Nuke
On July 21st both Oppenheimer and Barbie are coming out in theaters which is significant since these movies mark a shift away from repetitive storytelling in Hollywood. Over the course of the past few years, Hollywood has developed superhero fatigue, and repetitive storytelling and unnecessary sequels have been flooding the market. Thankfully, these issues do not apply to Barbie and Oppenheimer.
These two movies are vastly different, however, it is that difference that makes each story appealing. When it comes to Barbie, Its existential narrative is drastically different from Hollywood’s classical narrative and its hyperbolic comedic tone in regards to gender commentary also sets it apart.
On the other hand, Oppenheimer’s story is in many ways an inversion of Hollywood’s classical narrative where the main protagonist is viewed as an infallible character or morally justified. In short, both of these movies are unique stories and modern day cinemagoers are in search of genuinely unique stories that are not carbon copies of a cliche narrative. It is for this reason that these movies could shake the box office.
Additionally, Oppenheimer is directed by none other than Christopher Nolan, who is considered one of the best directors today. His involvement in Oppenheimer is a source of comfort for many moviegoers which is part of the reason why the movie is currently highly anticipated.
Both of these movies are about to be released while AMC stock is experiencing mounting short selling pressure. If these movies become box office giants, AMC’s revenues are likely to receive a much needed boost which would result in the stock running.
Short Data
In the meantime, AMC stock has a high short interest of 22.5% and 34.7% of its float on loan. At the same time, cost to borrow is extremely high at 206% and utilization is at 91%. In light of the stock’s short data, a major short squeeze could occur in AMC stock if Oppenheimer and Barbie prove to be the major hits they are expected to be.
Risks
Despite AMC’s short squeeze potential, the stock remains very risky due to the company’s financial situation. Currently, AMC is in dire need to raise capital and is incapable of doing so due to a lawsuit against the company’s planned 1 for 10 reverse split. Through this reverse split, AMC will have room to offer its shares to the public as the company’s outstanding shares are nearly maxed out. Based on this, the risk of bankruptcy could be extremely viable if AMC is unable to raise the cash it needs.
Another risk that could be facing AMC is Oppenheimer and Barbie not performing well at the box office due to the decline in moviegoers since the pandemic. If that is the case, AMC’s prospects could be bleak since both movies are arguably the most anticipated movie releases this year.
AMC Financials
According to its Q1 2023 report, AMC’s assets decreased QoQ from $9.1 billion to $8.8 billion and its cash balance also fell from $631.5 million to $495.6 million. On the other hand, total liabilities slightly decreased from $11.76 billion to $11.43 billion, however, current liabilities increased from $1.6 billion to $1.7 billion. Having said that, the most alarming thing in AMC’s balance sheet is the disparity that exists between its cash balance and its current liabilities. If not remedied, this issue could lead to bankruptcy.
AMC’s revenues have done surprisingly well in Q1 as they increased YoY from $785.7 million to $954.4 million. Meanwhile, operating expenses also increased YoY from $952 million to $1 billion. Despite the increase in expenses, AMC’s net loss decreased due to increased revenue resulting in a YoY decrease from $337.4 million to $235.5 million.
Technical Analysis
AMC stock is in a bearish trend with the stock trading in a downward channel. Looking at the indicators, AMC is trading below the 200, 50, and 21 MAs which are bearish signals. Meanwhile, the RSI is neutral at 40 and the MACD is neutral as well.
As for the fundamentals, AMC stock could witness a short squeeze this month due to the much anticipated release of Oppenheimer and Barbie. If both movies perform well at the box office, AMC would be able to realize more revenues in Q3 which would be a sigh of relief for the struggling movie theater. Moreover, developments regarding the lawsuit against AMC’s planned reverse split will be future catalysts as the company could file for bankruptcy if it is unable to raise the cash it needs to continue operating.
AMC Forecast
A short squeeze might be on the horizon for AMC stock with Oppenheimer and Barbie set to be released on June 21. Given that both movies are highly anticipated, a short squeeze may occur if they perform as well as expected at the box office. However, AMC stock remains very risky as the company has to raise capital to maintain its operations which cannot be done at the moment due to the lawsuit against its planned reverse split.
AMC Fundamentals
As things stand, AMC is the world’s largest theater brand and as such it has the potential to generate a significant quantity of revenue from a single blockbuster. For example, AMC made more than %70 of the box office gross from Avatar: The Way Of Water, and since it made $2.32 billion AMC made more than $1.62 billion. Keeping that in mind, two highly anticipated potential blockbusters are on the horizon.
Pink Nuke
On July 21st both Oppenheimer and Barbie are coming out in theaters which is significant since these movies mark a shift away from repetitive storytelling in Hollywood. Over the course of the past few years, Hollywood has developed superhero fatigue, and repetitive storytelling and unnecessary sequels have been flooding the market. Thankfully, these issues do not apply to Barbie and Oppenheimer.
These two movies are vastly different, however, it is that difference that makes each story appealing. When it comes to Barbie, Its existential narrative is drastically different from Hollywood’s classical narrative and its hyperbolic comedic tone in regards to gender commentary also sets it apart.
On the other hand, Oppenheimer’s story is in many ways an inversion of Hollywood’s classical narrative where the main protagonist is viewed as an infallible character or morally justified. In short, both of these movies are unique stories and modern day cinemagoers are in search of genuinely unique stories that are not carbon copies of a cliche narrative. It is for this reason that these movies could shake the box office.
Additionally, Oppenheimer is directed by none other than Christopher Nolan, who is considered one of the best directors today. His involvement in Oppenheimer is a source of comfort for many moviegoers which is part of the reason why the movie is currently highly anticipated.
Both of these movies are about to be released while AMC stock is experiencing mounting short selling pressure. If these movies become box office giants, AMC’s revenues are likely to receive a much needed boost which would result in the stock running.
Short Data
In the meantime, AMC stock has a high short interest of 22.5% and 34.7% of its float on loan. At the same time, cost to borrow is extremely high at 206% and utilization is at 91%. In light of the stock’s short data, a major short squeeze could occur in AMC stock if Oppenheimer and Barbie prove to be the major hits they are expected to be.
Risks
Despite AMC’s short squeeze potential, the stock remains very risky due to the company’s financial situation. Currently, AMC is in dire need to raise capital and is incapable of doing so due to a lawsuit against the company’s planned 1 for 10 reverse split. Through this reverse split, AMC will have room to offer its shares to the public as the company’s outstanding shares are nearly maxed out. Based on this, the risk of bankruptcy could be extremely viable if AMC is unable to raise the cash it needs.
Another risk that could be facing AMC is Oppenheimer and Barbie not performing well at the box office due to the decline in moviegoers since the pandemic. If that is the case, AMC’s prospects could be bleak since both movies are arguably the most anticipated movie releases this year.
AMC Financials
According to its Q1 2023 report, AMC’s assets decreased QoQ from $9.1 billion to $8.8 billion and its cash balance also fell from $631.5 million to $495.6 million. On the other hand, total liabilities slightly decreased from $11.76 billion to $11.43 billion, however, current liabilities increased from $1.6 billion to $1.7 billion. Having said that, the most alarming thing in AMC’s balance sheet is the disparity that exists between its cash balance and its current liabilities. If not remedied, this issue could lead to bankruptcy.
AMC’s revenues have done surprisingly well in Q1 as they increased YoY from $785.7 million to $954.4 million. Meanwhile, operating expenses also increased YoY from $952 million to $1 billion. Despite the increase in expenses, AMC’s net loss decreased due to increased revenue resulting in a YoY decrease from $337.4 million to $235.5 million.
Technical Analysis
AMC stock is in a bearish trend with the stock trading in a downward channel. Looking at the indicators, AMC is trading below the 200, 50, and 21 MAs which are bearish signals. Meanwhile, the RSI is neutral at 40 and the MACD is neutral as well.
As for the fundamentals, AMC stock could witness a short squeeze this month due to the much anticipated release of Oppenheimer and Barbie. If both movies perform well at the box office, AMC would be able to realize more revenues in Q3 which would be a sigh of relief for the struggling movie theater. Moreover, developments regarding the lawsuit against AMC’s planned reverse split will be future catalysts as the company could file for bankruptcy if it is unable to raise the cash it needs to continue operating.
AMC Forecast
A short squeeze might be on the horizon for AMC stock with Oppenheimer and Barbie set to be released on June 21. Given that both movies are highly anticipated, a short squeeze may occur if they perform as well as expected at the box office. However, AMC stock remains very risky as the company has to raise capital to maintain its operations which cannot be done at the moment due to the lawsuit against its planned reverse split.
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