AMC Entertainment Holdings Inc. (NYSE: AMC), the stock of which has been whipsawed by rogue traders, day traders and sophisticated hedge funds, has posted a 52-week low. Despite all the people who made money in the shares, some must have been crushed as the price collapsed. The reason for the sell-off is the most time-tested reason in the financial world. AMC is a dying company.
[in-text-ad]
AMC shares traded for $54 apiece last June. They currently change hands for barely $5. Rival Cinemark suffered from a downgrade by Credit Suisse from Outperform to Underperform. Simply put, the reason for the action was that there are few movies on the horizon expected to bring in hordes of people.
[nativounit]
An analyst who spoke to CNBC said that AMC has enough cash for the time being. But does it have a viable business? Eric Handler, media and entertainment analyst at MKM Partners, said, “I think they can limp along for many years with their current balance sheet.”
[wallst_email_signup]
Blockbuster films are not even the most pressing problem. Streaming services, particularly those from Amazon, Disney, HBO, Hulu and Netflix, have over 100 million U.S. customers among them. Some households have two or three of these services. These households have access to tens of thousands of films and TV series. Amazon and Netflix have become their own studios, and their productions are not available in theaters. AMC is trapped with limited inventory.
[recirclink id=1173715]
AMC’s problem is rare among large American companies. It has nowhere to turn for new revenue, so the best management in the world cannot save it.
AMC Gets Crushed
© Pgiam / E+ via Getty Images
Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.
McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.
His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.
A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.
TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.
McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.
Top Gaining Stocks
Top Losing Stocks