In Theaters Near You: An In-Depth AMC Analysis [Response to CNBC] -

Please enable JavaScript to view the full PDF

(credit: thanks IG:@wydstockbros for compiling the research) To get things started, I'm not a financial advisor, I'm not a bot, and this one goes out to you, Chamath. ——— tl;dr AMC is the global leader in a $17 billion dollar industry that’s been beaten senseless to the ground with so much room to run. After pioneering deals with streaming services, buying out their competition, and upgrading their facilities worldwide, 80% short interest is highly inappropriate for its TRUE fundamental value—$69.69+ a share. 🚀🚀🚀🚀🚀🚀 🚀🚀🚀🚀🚀🚀 🚀🚀🚀🚀🚀🚀 🚀🚀🚀🚀🚀🚀 $AMC TO $69.69 $AMC TO THE MOON ——— "I'm questioning whether they[WSB] are actually doing the research when it comes to things like GameStop and AMC ..." - clueless CNBC dude. I fuckin miss movies. And when I say movies, I mean the whole damn experience. I wanna buy my $15 popcorn, pour an ungodly amount of butter and jalapenos on that shit and munch in a recliner seat watching at 4k. I like this stock. For the past few days, I've been scouring Google for news articles and company data. I've also been trying to find some detailed DD in here but they’ve all been pretty limp-dick when it came to AMC. And most of the news articles I've read were surface level AT BEST with a grim outlook based on first-glance analysis. Guess these analysts are just too damn lazy to dig deep. Because when we dive into these issues, we can easily see that the theater giant may not be in as bad a situation as the media/analysts are claiming. In fact, I believe that AMC is absolutely misunderstood, overlooked, and undervalued. Here is why I am more confident than ever that $AMC will not only reach $30 but is in the perfect setup to see ATHs and WELL ABOVE. I. Ugly Start, Beautiful Setup Chances are if you are currently holding a significant position in $AMC, then most likely you've already read up on the company and its current standing in the cinema industry. You've probably read about how the corporation has nearly $5 billion dollars worth of debt with many of its locations still closed as the pandemic remains a global issue. You may have realized that new movies haven't been coming out. But more than that, you're seeing that movies are just being released on streaming platforms anyway. You might be concerned for AMC, or even the industry as a whole. All of these concerns are very valid and based on real uncertainty, but let's break down each of these points and see if they’re as bad as analysts claim. II. A Discussion on Debt Media outlets keep honing in on this debt like it’s an ugly scar of the corporation. But what we need to focus on is why that debt came to be, how the money was spent, and how this debt was a strategic play in order to cement AMC into the new era of cinema-streaming. We can categorized the money used into four parts: ● New equipment and amenities ● Lease payments ● Maintenance costs (utilities, wages, etc.) ● Expansion (buying out the competition) Pay close attention to the last category because this one is important. Over the past five years, AMC has been acquiring smaller theater companies like Odeon. After buying out these companies, AMC then had to suit its "new locations" with the standard luxury amenities AMC is known for. This makes for a significant bulk of their debt totaling over $3 billion in just acquisitions. This was the investment that helped solidify AMCs spot as the world's largest cinema chain. On the topic of maintenance costs, AMC managed to raise enough money to get through 2021. With ongoing news of vaccines, we can hope their efficacy leads to a speedy reopening near mid-late 2021. But when the economy does reopen—and AMC is back at full operation—what will it look like? III. The Future of AMC There's an elephant here.. right in this very room. Yes, streaming and cinema have had some serious beef in the past. In fact, some cinema chains are having tensions with streaming to this day. But what has AMC done in regards to streaming? They were the first to settle deals in order to partner up and take part in streaming revenue. Yup, you read that right. AMC is both having their cake and eating it too. Why would motion picture companies do this? Why not just end the cinema industry? To put simply, analysts are deeply underestimating the value of the "cinema experience". Just as I mentioned in the intro, I miss the cinemas. But I am definitely not alone. But let's not talk about me and the hypothetical "people'', instead let's talk about research studies. In a 3-year study done in Korea, researchers found that shortening the window of cinema exclusivity and releasing movies on streaming early did not have a significant effect on ticket sales. And though this is a limited study done outside of the US, remember that AMC is a global corporation and these results have a hopeful outlook for the future relationship of cinema-streaming for AMC worldwide. "But wait, you still haven't mentioned what streaming gets out of this?" It's not what streaming "gets out of this" but rather what these motion picture companies maintain in keeping a healthy relationship with cinemas. During the peak heat of the movie theater-streaming feud, AMC halted the showing of Trolls and vowed to never show a Universal Pictures film in its theaters again if they were to continue releasing their films on streaming platforms without a proper cinema-exclusivity window. But today, we can see that the tensions have fallen and both motion picture companies and AMC have found a way to mutually benefit each other. Now besides streaming, AMC has been investing in luxury amenities as seen by their chairs, 4K laser projectors, MERV air filtration, and ultra-surround sound speakers. With so many locations and so many amenities, they are offering full theater rentals with high demand during the pandemic. AMC has further cultivated their century-old movie experience into modern times. And this pandemic didn’t just change their amenities. They had to learn how to cut costs and have more efficient operations in order to survive. This only spells good news for when they emerge with better operations, more money to spend, and higher valuations. So that begs the question, how high can the company's share price go realistically? IV. Valuation First, let's look at the Movie Theater industry as a whole in comparison to a few other popular entertainment industries: Movie Theater US Market Size $17.1 billion Casinos US Market Size $15.7 billion Amusement Parks US Market Size $14 billion Music Label Music Production US Market Size $9.4 billion Music Publishing US Market Size $7 billion In the world of entertainment, cinema is a very lucrative business. And, again, who is the largest movie theater chain in the world? Yup, AMC. Clueless CNBC dude mentioned that we retail traders don't trade with a fundamental reason but is there a fundamental reason in shorting a $17 billion dollar industry GLOBAL leader down to its grave? Does AMC deserve to die? I surely don't think so. Now I won't touch upon squeezes in this since I'm sure many of you folk have already read/heard enough about them, but I will leave this quick intuitive article about it. And yes, these shorts can and will be squoze once we have faith in our upper valuations and investors(we) begin buying again. And buy again we will. As many users flee limp-dick Robinhood and join one of the real brokerages, their positions/funds will be settled and ready to trade come next week. Where do you think these angry RH refugees will be putting their investments? That's right, exactly into the positions that RH stopped them from buying last week: which includes $AMC. If you were part of the RH user base and your plays were affected by the blatant market manipulation, it's not only "not too late", but I believe it is an opportune time to BUY. How high can it go then? When will I know it's too late to take a position? So when we talk about valuation, many people fear the uncertainty of a stock rising far past its current value. Well, I think Chamath Palihapitiya said it best: "Everybody that bought that stock is also underwriting how they want to own it." In our current price-action environment, it's not too ridiculous to see how we are forming the foundations for AMC to continue rising beyond ATHs. We are already hitting nearly $16 on the day and rallying +53% while enduring heavy trade restrictions. Who's to say that this passion cannot continue? Now I’m no expert and can’t tell you how high this can go, but I am personally eyeing $69.69 as a target. With so many current factors at play including hype, short covers, and ITM options having to be exercised, this is actually the BEST entrance to manifest its ATH valuation and chart some never before seen territory in its price action. It's like the manifest destiny of stock valuation. In fact, we may never see this opportunity for AMC again if we don't act now and solidify its value upward. At the end of the day, prices are what the buyers/sellers settle upon so WE can pioneer that value if we damn well please. This is what a free market is all about. Will there be people that disagree with this? Sure. Will people continue to short AMC as it goes up? Absolutely. Do I think that AMC being shorted nearly 80% and rising is fair? Really? See section III. But institutions are selling off! Like Silver Lake liquidating their 44m shares. Yes, then the next day $AMC dipped to $7.50 and has since recovered… with AMC $600m less in debt. We all know who is shorting AMC, and I am sick of these hedge funds who think they, alone, can decide whether or not a company is worth a damn. V. Conclusion - Resurgence We are at the cusp of AMCs resurgence. Because most of us have been kept from participating in social activities, we can better understand that the public is yearning for a sense of normalcy. Sure we've gone pretty far with just watching movies on our TVs or computers through the pandemic, but that doesn't scratch the itch for many folk. What you're investing into when you invest in AMC is the entire experience in tandem with its new streaming deals. And having been beaten so low—while still holding such great fundamental prospects— its share price is ready to blow up. In the future when “The Deep Squeeze” is turned into a movie, we’ll be a part of history. And you’re going to want to see it on the big screen. ——— 🚀🚀🚀🚀🚀🚀 🚀🚀🚀🚀🚀🚀 Position: $50k in calls and shares 🚀🚀🚀🚀🚀🚀 🚀🚀🚀🚀🚀🚀 $AMC TO $69.69 $AMC TO THE MOON