With retail investors and meme stock-interest driving the stock price of AMC to an all-time high recently, an analyst has now declared what they feel the stock is actually worth. Chad Benyon and his team at Macquarie have stressed their price target of $6 USD — less than half the price of a single ticket to an AMC theater.
The note released by the Macquarie team pointed to underlying issues at the company: “Despite shares now up 2,850% year-to-date (as of 6/2 close) vs. the S&P 500 of 12%, AMC balance sheet is still hampered by nearly $5.5 billion USD of debt as of the end of Q1 2021 and our projected leverage of 12.3x by year end 2022. AMC, the largest global player (945 theaters) should benefit from the rebound in theater demand, which is urgently needed in order for the company to address deferred rent ($450 million+ USD), maintenance capex (~$100 million USD), and high annual interest (~$420 million USD).” The analysts also believe that AMC could lost almost $2.5 billion USD between 2021 and 2023.
After stock price rose by almost 100% in one day, AMC announced it was issuing 11.55 million new shares, leading to a 31% tumble. On June 3, markets closed with AMC stock valued at $51.34 USD per share, following a peak at $62.55 USD — 10 times the Macquarie analysts’ valuation — earlier in the week.
In other business news, Bitcoin recently took a 5% dip following another Elon Musk tweet.