AMC Entertainment Holdings Inc (NYSE: AMC) is set to report its earnings tomorrow after the closing bell, and the bobbleheads in media seem to be spreading the doom and gloom picture, something that I’ve expected to see considering the corruption surrounding the stock (for more details on that, click here).
Is The Doom And Gloom Justified?
If you’ve been following my work as of late, you know my answer to the above question. Of course the doom and gloom isn’t justified. I’ve received countless emails from readers showing proof that hedge funds are paying media to spread the doom and gloom story in an attempt to profit from sending the stock to the bottom.
If they have their way, they would send it to bankruptcy, but the retail investing community isn’t having it.
Let’s break it down a bit:
Earnings Per Share
Depending on which source you go to, a loss of somewhere between $1.30 and $1.40 per share is expected. Along with these expectations, the “experts” on Wall Street are saying that they outline the fact that the company is, and will continue struggling.
To those pointing to the company’s previous struggles, I say Kudos. I agree with you. The company has struggled, along with the masses across the United States. Have you already forgotten that there was a COVID-19 pandemic that caused the closure of business for an extended period of time?
Saying that the company has struggled over the past year, and that those struggles will be seen on the earnings report is like saying boats float. Sure they do. We know they do. What’s next?
The fact of the matter is that AMC theaters just reopened the vast majority of its theaters toward the end of the quarter being reported on. So, there’s no expectations of smash hit earnings, and if the company didn’t produce a loss, I along with every APE paying attention to AMC, would be surprised.
Nonetheless, peddling the fact that the company most likely lost money in the quarter seems to be the go-to story for mainstream media.
The Positive Is Being Given A Negative Twist
Throughout the pandemic, there has been a bit of positivity. The company was able to raise money through the sale of share, and a ton of it. Sure, investors don’t like dilution, but the dilution has helped the company to restructure its financial position, which will likely lead to strength ahead; something that nobody seems to be talking about.
While the talking heads in the media continue to point to the fact that the company raised quite a bit of funds, stating that it was a horrible thing, I like to think of things from outside of the small box the media seems to have locked itself into.
I like to think of the future.
At the end of the day, AMC has done what was best for the company and its investor. It new it would need funds to stay afloat as COVID-19 found its way behind us, and it acted as such.
This is where the positivity in the earnings report comes in.
Through the fund raises, AMC is likely to report a pretty strong balance sheet. One that will easily get it through the rest of 2021 without the need for an additional fund raise and one that sets the stage for potentially significant growth ahead.
Keep in mind that the vast majority of theaters are now open, and consumers tired of being cooped up in their homes are looking for low-cost things to do, like dinner and a movie.
As a result, there’s a strong chance for a recovery here, especially considering the fact that the company has all the funding it needs to make it to, and through that recovery, which should be the big story, not the idea that the company had any other choice but to raise funds during a pandemic.
Pile on the hate mail hedge funds because here it comes:
Moving forward, the picture isn’t one of doom and gloom, it’s one that depicts a silver lining surrounding a very dark cloud.
The fact of the matter is that the COVID-19 storm is passing, albeit slowly, but it’s passing nonetheless. Sure, I’m expecting that the first and second quarter will result in losses, but as we move into the third and fourth quarter of this year, you may be surprised at what happens.
Summer vacation is coming for students, and these students are going to be looking for things to do. Once again, the classic movie theater experience is likely to be on the top of the list. At the same time, there are several blockbuster movies expected to be released in the relatively near term.
Movies that touch on classics, bringing back a touch of nostalgia are expected to be met with incredible demand. Don’t forget, Cruella and Space Jam A New Legacy, Fast & Furious 9, and Spider Man No Way Home are all coming soon to theaters near you.
Hedge funds would like you to think that the masses are going to sit these big names out, but do you really think that’s true? How many people that love the Fast & Furious or Spider Man franchises are going to choose to forgo the big screen experience when the newest movies in these areas are released?
How many people are going to pass up the chance to bring back the feeling they got when they saw Space Jam the first time in theaters decades ago?
With vaccines being jabbed into the majority of American’s arms, how many people are still afraid to leave their homes?
The Bottom Line
I’ve never been a fan of the doom and gloom concept, and maybe that’s to my own demise. However, I just don’t see what the hedge funds, and many so-called experts on Wall Street, are seeing.
What I see is an opportunity for a tremendous recovery, a company that put itself on a strong enough financial footing to take advantage of that opportunity, and a massive crowd of retail investors that’s ready to support the company through the process.
Not to mention the massive short squeeze that’s likely on the horizon.
To boil it all down to one word, I see “opportunity,” and no amount of hate mail from rich Wall Street pundits will change that.
A Special Thanks
I’d like to take this opportunity to thank you, the audience that reads my articles and supports my willingness to go against the grain. I’ve enjoyed reading your emails and getting to know you. I’ve attempted to respond to each and every one of you, but with the flood of messages I’ve been receiving, there are a few that I’m sure have slipped through the cracks. So, if you’re one that hasn’t received a response, here’s a thank you just for you. Thank you for reading and supporting my work, and perhaps more importantly, thank you for choosing to be an APE and being part of a movement that will hopefully lead to the end of hedge fund manipulation in due time.