To The Moon

A overhang traumatising $AMC Entertainment(AMC)$  shareholders was finally lifted after the theatre chain raised almost $326 million from its latest fund raising by issuing 40 million new shares.

The stock dilution which had originally led to roller-coaster rides on the stock was finally welcomed by the boost in cash reserve much needed for its survival to avoid a liquidity crunch, which unresolved would have led AMC to file Chapter 11 for bankruptcy protection.

Nevertheless, the company has still much work to strengthen its fundamentals after the onset of the pandemic damaged its business, as it struggled with vacant theatre halls. Expectation of higher interest rates for longer to rein in a sticky inflation will be increase borrowing costs should its new capital from the equity issue dries up.

Easing of the pandemic has yet to bring back all the crowds and cheers, as rising competition from online streaming providers the likes of $Amazon.com(AMZN)$ , $Netflix(NFLX)$ , $Walt Disney(DIS)$ and even $Microsoft(MSFT)$ has given AMC a run for its money.

AMC will need to reinvent itself to adapt to the new normal and stay relevant, while remaining competitive. Until then, I prefer to stay away from its stock.

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