“Bubbles tend to topple under their own weight. Everybody is in. The last short has covered. The last buyer has bought (or bought massive amounts of weekly calls). The decline starts and the psychology shifts from greed to complacency to worry to panic.
I'm not sure you understand the apes, and that makes sense: after all, you're a chicken.
This is an attempt to corner a market with the hopes of attracting shorts who will be unable to cover.
Sure there's people who talk about fundamentals, waging wars in memory of '08, blah, blah, bah. But the OG apes like to peddle that the fundamental investment thesis is manufacturing a short squeeze through buying every dip and holding. See @ReviewDork on YouTube/Twitter as chief evangelizer of this strategy: to him, fundamentals do not matter.
The $100K figure is born of this logic as well... how do you lure enough shorts that will be forced to cover at any price? How do you convince people to HODL till that moment?
Given the street is thirsty to short this sucker (I already did, and I'm out for now...), I wouldn't be surprised if it becomes overshorted once again, and the apes momentarily gain the upper hand. What makes me wary of staying short this down to $10 is how much of the float retail holds (60%+?!??!) and that the price has stayed at $30 despite the insane issuance.
Another keeper from the chicken! Just one more data point required: presumably the Reddit crowd bought in because they are betting on a mother of all short squeezes, and not on any “Stupid Way” calculation. Has the blowout in newly issued stock weakened their case?
Great catch thank you! I hate that cash flow statements are ytd by convention. It doesn’t change their anticipated runway, as nobody files with zero cash.
No mention of a plethora of blockbuster movie's waiting in the wings to be released?
No mention of a potential Roaring 20's type of bounceback?
No mention of Net Debt and when debt is actually due?
No mention of EPR and other landlords potentially taking a % of receipts instead of just straight cash as rent?
No mention of the production companies needing theatres to survive in order to make their own business models work and thus likely to kick in if necessary?
No mention of AMC taking market share as other theatres fail before they do?
This is just a hit piece that chooses to ignore what is inconvenient to its thesis. The stock is way overpriced, the 2025 bonds are a deal with more than a 16% YTM.
I’ll assume you aren’t trolling and I’ll give you a thoughtful answer. In order: The box office numbers speak for themselves. Roaring 20s? Ok. Sure. There are better ways to express that belief than AMC. I mentioned the debt and the cash balance - that’s what net debt is. I also mentioned the cash burn and accurately portrayed their runway ahead. Your story on rent for AMC strengthens my case - it doesn’t weaken it. No production company has kicked in so far and it’s not like Aron didn’t beg them. The other theater operators are in much stronger shape than AMC, even now. I see you agree the stock is way overpriced. With respect to bonds, that’s a pretty intelligent market and I would hesitate to assume easy yield just sits around waiting for people who get riled up over a substack piece to waltz in and take everyone’s money. Good luck and thanks for reading!
@doomberg... please stop engaging these extreme views. I tried doing that with a believer on a thread for Lordstown and the dude is still thinking that company has the best shot at producing an electric truck (this is after Ford announced their electric F-150).
I'm absolutely not trolling. I have real money invested and thus especially want to hear those with differing opinions. Sometimes they are right and it saves me money.
one of the best articles on the insanity of markets I have read in some time.
Thanks for the great article
Mr. Doomberg, please write AMC Part Deux. The chickens are waiting.
Great piece.
It’s just that a typo makes a small liability: "It’s current assets" should rather be "Its current assets".
great analysis!
I'm not sure you understand the apes, and that makes sense: after all, you're a chicken.
This is an attempt to corner a market with the hopes of attracting shorts who will be unable to cover.
Sure there's people who talk about fundamentals, waging wars in memory of '08, blah, blah, bah. But the OG apes like to peddle that the fundamental investment thesis is manufacturing a short squeeze through buying every dip and holding. See @ReviewDork on YouTube/Twitter as chief evangelizer of this strategy: to him, fundamentals do not matter.
The $100K figure is born of this logic as well... how do you lure enough shorts that will be forced to cover at any price? How do you convince people to HODL till that moment?
Given the street is thirsty to short this sucker (I already did, and I'm out for now...), I wouldn't be surprised if it becomes overshorted once again, and the apes momentarily gain the upper hand. What makes me wary of staying short this down to $10 is how much of the float retail holds (60%+?!??!) and that the price has stayed at $30 despite the insane issuance.
Exceptionally well written piece
In the 5 minutes it took me to read this, AMC lost $13,000.
Another keeper from the chicken! Just one more data point required: presumably the Reddit crowd bought in because they are betting on a mother of all short squeezes, and not on any “Stupid Way” calculation. Has the blowout in newly issued stock weakened their case?
👍
WOW - this was very good one and easy to understand
547M loss from operations should be last *six months. good article nonetheless….
Great catch thank you! I hate that cash flow statements are ytd by convention. It doesn’t change their anticipated runway, as nobody files with zero cash.
I fixed it in the article.
No mention of a plethora of blockbuster movie's waiting in the wings to be released?
No mention of a potential Roaring 20's type of bounceback?
No mention of Net Debt and when debt is actually due?
No mention of EPR and other landlords potentially taking a % of receipts instead of just straight cash as rent?
No mention of the production companies needing theatres to survive in order to make their own business models work and thus likely to kick in if necessary?
No mention of AMC taking market share as other theatres fail before they do?
This is just a hit piece that chooses to ignore what is inconvenient to its thesis. The stock is way overpriced, the 2025 bonds are a deal with more than a 16% YTM.
there is a reason that 16% (or whatever it is today) is paid out. the level of risk is batshit lunatic level.
I’ll assume you aren’t trolling and I’ll give you a thoughtful answer. In order: The box office numbers speak for themselves. Roaring 20s? Ok. Sure. There are better ways to express that belief than AMC. I mentioned the debt and the cash balance - that’s what net debt is. I also mentioned the cash burn and accurately portrayed their runway ahead. Your story on rent for AMC strengthens my case - it doesn’t weaken it. No production company has kicked in so far and it’s not like Aron didn’t beg them. The other theater operators are in much stronger shape than AMC, even now. I see you agree the stock is way overpriced. With respect to bonds, that’s a pretty intelligent market and I would hesitate to assume easy yield just sits around waiting for people who get riled up over a substack piece to waltz in and take everyone’s money. Good luck and thanks for reading!
@doomberg... please stop engaging these extreme views. I tried doing that with a believer on a thread for Lordstown and the dude is still thinking that company has the best shot at producing an electric truck (this is after Ford announced their electric F-150).
I'm absolutely not trolling. I have real money invested and thus especially want to hear those with differing opinions. Sometimes they are right and it saves me money.
Nice takedown....AMC is posterchild, but who else deserves it, let me check other stocks Melvin Capital shorted...sounds like a useful proxy
Pity that Blockbuster didn't make it to the Super Stonks Market Era, the apes would've taken it to the moon.
nope. to Mars.