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AMC Entertainment (NYSE:AMC), the world’s largest cinema chain, lost nearly 76% of its value in 2022 – starting the first trading day of the year dipping 3% to $16.29, but landing at $4.07 per share to close out 2022’s trading.
That’s a far cry from its 2021 full-year performance: AMC stock rose from $1.30 at the end of 2020 to $16.71 a year later, juiced by a series of huge gains for the “meme stock” during a strange pandemic year for the theater industry.
Its 2022 got even weirder, if that were possible, as CEO Adam Aron used the company’s rescue from near-bankruptcy (thanks to an army of retail-investor “apes” pouring new money into the business) to pursue some Reddit-friendly initiatives – including nonfungible tokens, accepting cryptocurrency (and perhaps issuing its own), and variable pricing.
And the company even made a strategic move outside the movie industry, in March investing in gold mining via a stake in Hycroft Mining Holding, a move that may have been linked to distressed-debt investor Jason Mudrick.
The end of March marked a 2022 top for AMC stock (AMC) (specifically, a 52-week intraday high of $21.09 on March 29, after the prior day’s 42.3% jump).
Among some top Seeking Alpha calls picked by editors, contributor Max Greve was spot on. On the evening of March 28, Greve cited AMC’s then-monthlong run-up of 50%, asking whether there was more upside.
No, Greve concluded. Despite a run that pushed its market cap near $10B, “AMC needs to generate $500M a year in profit to reach a 20 P/E ratio,” Greve said March 28. “At the moment, it’s still bleeding red ink.”
“AMC has not made the substantial changes to its business model that would justify its run up over the last month,” Greve said then, noting that the goldmine purchase “should not distract investors from the dynamics in its core industry,” and adding that with innovation sorely needed, AMC’s only new initiative – adding ticket surcharges to blockbusters like The Batman – “could at most boost revenues about 6%; the industry has shrunk 50%” since the beginning of the COVID-19 pandemic.
AMC heads into 2023 with concerns still hanging over the company about its debt.
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