AMC stock hits 52-year low amid debt reduction plans
Yahoo Finance Live anchors discuss AMC Entertainment stock falling to a 52-week low amid debt reduction plans.
Video Transcript
[AUDIO LOGO]
BRIAN SOZZI: Welcome back. While we await the opening bell on Wall Street, let's dive into a few hot Yahoo Finance ticker pages. First up is AMC, surprise, surprise. As the company hit a 52-week low, closing Wednesday, $3.84, down from $21 in March. And Brad, this comes as S&P-- I'm just shocked by some of these comments.
S&P showing it has a pulse in its research. Saying, "In our view, AMC is pursuing this transaction--" Of course, that debt for-- debt for equity transaction we reported here last week. "--because its capital structure is unsustainable and has limited options to reduce its debt burden and improve its cash flow." That type of aggressive commentary you do not usually hear from an S&P. But the fact that it did come out with it at a time where AMSheer-- AMC shares have been under considerable pressure, I think is noteworthy.
BRAD SMITH: Yeah, and this really in reaction to some of their debt reduction plans. And look, for AMC, the years, perhaps not exactly what they had framed it up to be, especially on some of the blockbuster releases that had come out in the content schedule.
And now looking out to next year, I mean, what really is going to be able to kind of lift the tide for a lot of that moviegoing experience where we already know so much of the fanfare around some of the most viral titles, it continues to still be around titles that you can stream right now or titles that make it to streaming that much faster. So what is the draw for somebody to say, you know what? I'm gonna pay up. I'm gonna buy an overpriced concession that's probably hyped by about 400%.
BRIAN SOZZI: Look at that popcorn, though, Brad.
BRAD SMITH: Yeah, that popcorn could cost you $2.00--
BRIAN SOZZI: It looked really good.
BRAD SMITH: --$2.00 in store.
BRIAN SOZZI: AMC's coming out with that in the store now.
BRAD SMITH: Probably $10 at the movie experience. $14, probably. So I mean, all of that considered, in a recession where people are gonna be looking at their discretionary spending, if there's one area that they're going to look across the experiences dollars that are going out the door or at the window in this case, then that movie theater experience might get pulled back tremendously.
And so what does that mean for AMC? Even in some of their own plans to prop up the movie theater experience and bring back some of the moviegoers through any type of Stubs membership or, you know, subscription service in the future.
BRIAN SOZZI: Brad, you know, I agree with most everything you say. I got to push back on the movie theater experience.
BRAD SMITH: Do it.
BRIAN SOZZI: I saw "Top Gun" over the summer. I went in there--
BRAD SMITH: Yeah, but you're a big "Top Gun" fan.
BRIAN SOZZI: Sure. But I saw it in a comf--
BRAD SMITH: That's how a kind of reverence in the theater.
BRIAN SOZZI: Sat in a comfy, reclining seat. Had a big giant piece of pop-- like box of popcorn. It was just a great experience. I mean, the chairs, I was able to lean back. I put my soda right here, a Diet Coke. It was great. It was great.
BRAD SMITH: I'm not saying--
BRIAN SOZZI: I can't do that in my house.
BRAD SMITH: --it's a bad experience.
BRIAN SOZZI: I can't do it at my house.
BRAD SMITH: It's just not an attainable experience for what $90 for the family? You know how many months you could pay for a streaming service for $90?
BRIAN SOZZI: That's true. That's true.
BRAD SMITH: You might be able to buy Disney+ for like a year on that.
BRIAN SOZZI: Well, you're going at-- you're coming at it from the family aspect. I'm talking about it from the single guy, who went to go see "Top Gun" by himself.
BRAD SMITH: And you paid--
BRIAN SOZZI: So it was a cheap experience for me.
BRAD SMITH: --$25.
BRIAN SOZZI: Yeah, it was great.
BRAD SMITH: Yes.
BRIAN SOZZI: It was awesome.
BRAD SMITH: Exactly.
BRIAN SOZZI: Never better.
BRAD SMITH: That's three months on any subscription service.
