More than two years ago, I angered IMAX (IMAX) bulls by asserting that the company had a collapse in its future. I stand by this assertion, and broaden my thesis with additional perspective from a source(s) I'll identify collectively as "George" who, several years ago, considered acquiring the company.
IMAX does not have a business model that will create long-term growth. Its core business generates roughly the same revenue year-to-year, while hitching its growth wagon to a joint-venture concept whose outcome is unpredictable. This strategy incurs significant and unquantifiable long-term risks. Investors do not understand these risks, yet are paying 38x estimates for the stock.
My conclusion is that it is now time to ...
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