Is AMC on the path to recovery?

🌟🌟🌟In a week that has seen geopolitical conflicts in the Middle East and volatility in the markets,  AMC has seen quite a fair bit of market action.

$AMC Entertainment(AMC)$  is up 8.2% today and has jumped 18% in the past 5 days.   Shares of AMC soared 10% on Tuesday, registering its biggest daily percentage gain since February 6 when it rose 10.9%.

AMC rose on no apparent news and snapped a 4 day losing streak.  Is this due to Short Squeeze?  A Short Squeeze is a term used to describe a phenomenon in the markets where a sharp rise in the price of a stock forces traders who previously sold short to close out their positions.  The strong buying pressure "squeezes" the short sellers out of the market.

CEO Adam Aron has dismissed bankruptcy concerns last week.  He said that Chapter 11 Bankruptcy is "inconceivable" for AMC despite the turmoil of the last few years.

AMC is on a mission to tackle its debt load.  In December AMC completed an at the market equity offering,   raising USD 350 million as it tries to reduce its debt burden.

Last month, AMC filed to sell up to USD 250 million in stock.  With a significant USD 2 billion debt maturity looming in 2026, it is good that AMC is taking action to pay off its debt.

The good news for AMC is the upcoming blockbuster releases this year.  In 2023 Taylor Swift Eras Tour shattered the AMC Theatre 's single day advance ticket sales record, bringing in USD 26 million.  Then there was Beyonce' s movie Renaissance in December.

AMC also benefits from having the largest IMax presence and potential growth in premium viewing formats.

Performance wise even though  AMC is up 18% this week, it is still down 48% year todate.  In 2023 AMC has plummeted 91%.

Wall Street Analysts are mixed on AMC with a Target price of USD 5.22, an upside potential of 65% according to Tipranks. 

It is still an uphill climb for AMC to recover and pay off its huge debts but CEO Adam Aron says that the future appears cautiously optimistic as AMC prepares for the upcoming blockbuster releases in 2024.

Let's hope AMC can survive and thrive to live up to its slogan "We Make Movies Better". 

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