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AMC Entertainment: Dilution, Dilution, And Even More Possible Dilution To Avoid Bankruptcy

WYCO Researcher profile picture
WYCO Researcher


  • AMC raised $1.322 billion cash over the last few months.
  • The total number of shares outstanding has risen from 109.3 million last August to 460.3 million currently.
  • Investors seem to be ignoring the massive equity dilution.
  • AMC continues to burn huge amounts of cash each month.
  • Movie releases keep getting pushed out to later dates.

The timing of the recent stock market trading insanity rescued AMC Entertainment Holdings (NYSE:AMC) shareholders from being wiped out by a possible Ch.11 bankruptcy. There was a very real possibility a few months that AMC would be filing for bankruptcy in early 2021, but that is now not going to happen or at least not in the near future. The company was able to raise $1.322 billion by selling new shares and by borrowing additional money. The new reality facing shareholders is the extreme increase in dilution. The market either does not understand the dilution issue or it is ignoring the problem when pricing AMC stock. AMC is currently way over priced.

Current AMC A Shares Outstanding

There seems to be significant confusion over the current number of total AMC shares outstanding. This is how I am calculating the current number of A shares outstanding:

356,498,711-stated in a prospectus filing that assumed all 50 million shares would be sold in the offering, which were in fact sold.


44,422,860 from the conversion of the convertible secured debt by Silver Lake.


46,103,784 by Wanda converting their AMC B shares to AMC A shares, after subtracting 5,666,000 shares that were forfeited by Wanda when Silver Lake converted their debt to shares under a prior agreement.


13.3 million shares -from a press release indicating 63.3 million shares were sold, including shares sold under a prior offering (63.3 million-50 million=13.3 million) (13.3 million might be a rounded amount)

460,325,355 Total Class A AMC Shares Outstanding

No Class B AMC Shares Outstanding

Market Capitalization

Using 460.3 million shares and the latest AMC stock price of $5.60, the current market capitalization is $2.58 billion. FINRA's website shows $1.90 billion and 339.07 million shares. Seeking Alpha shows $2.09 billion capitalization. I do not think the media keeps track of

This article was written by

WYCO Researcher profile picture
B.A. in Economics; M.S. in Finance. I usually write about distressed companies and companies in Ch.11 bankruptcy. I am semi-retired after spending decades in investments.

Analyst’s Disclosure: I am/we are short AMC. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (192)

How much did you lose on this trade, it was at $5.70 when you wrote this. Just for transparency.
Alex Hardman profile picture
@dkeat I think he established a short around $14 or so, most likely at least that position has proved out profitable for him. He posted a comment on March 15th, that he was going to establish a position, which is the recent high since the article was written.
@dkeat Transparency :)) almost nobody is transparent about their losses, unless obligated under some law .
So he admits to breaking the law. Citadel is flooding the market with shares that don't exist. Shares issued by AMC have all been sold. What they are doing is using the stock lending programs on RobinHood and Webull to create these fake shares, sell them to RobinHood and Webull's clients KNOWING THAT THEY ARE INTENTIONALLY BANKRUPTING THE COMPANY. If this author is shorting AMC now, he is complicit is this criminal behavior. He is BORROWING fake shares and selling FAKE SHARES. I am taking names of every "journalist" involved writing up my criminal complaint for the F.B.I
Oof. This didn't age well.
Alex Hardman profile picture
@Trader Joey WYCO wasn't saying one can't make money trading this stock, clearly it is very volatile and a lot can be made from calling the swings in price correctly. His argument is more along the lines if you are looking to buy and hold this security for a year or so plus, you probably will lose money in the long run. He tends to write several articles with the intent to act as a warning to investors that might have missed some of the details. In this case, the massive dilution that has taken place at AMC, which while good for creditors, might not be so great for shareholders long term.

He also waited until the March 15th to initiate a short on the stock, but didn't short it when he wrote the article. Which is probably his way of saying, "Ok, now the price is ridiculous." And so far, that day has been the high point since he wrote the article.
@Alex Hardman I think he also shorted a few weeks or months before this article was written and then he also said in a follow up that he covered at around $2 or so before all this meme mania. Then you have the post below on Mar 15 that he is planning to short again. The meme runup definitely saved AMC from BK so a lot of people were wrong. These are not normal markets so almost anything is possible. Ironically, I was looking at AMC as the meme craze developed and saw what Hertz could have been if only Hertz had an ATM already filed or had the guts to play the game with the SEC to file a new one at the time. All companies should have an ATM ready in this market. Lol, we can do ATMs too.... I would advise everyone place limit sell orders at crazy higher stock prices for their own random positions. You never know when your stock can be meme'd.
Alex Hardman profile picture
@parity I completely agree, all companies should have ATMs and stock buybacks ready to go so whenever prices bounce to one or the other extreme, they can take advantage of the situation without first having to signal their intention allowing everyone to front run them.

The more precise point of my previous comment is, there is a big difference between investing and trading. And Wyco was focused on the investors with this article, not the traders.
WYCO Researcher profile picture
I am expecting short AMC this morning-easy to borrow.
@WYCO Researcher Good luck. Looks like it is running up higher short term on stimulus money pump.
Company is awfully quiet in last few weeks. I wonder why they have not declared a new filing for ATM or block raise. Could it be to allow Wanda to sell off their stake first?
When people sell a bunch of call options that unexpectedly end up in the money, the underlying fundamentals of the business don’t matter.
“In a dark crowded movie theater” that’s a very bearish way to put it. I think the problem is when people are bearish against a company and write an article, they tend to lose site of why they’re writing and focus on their personal feelings. Rightfully so, if you’re bearish you want the stock to plummet so you can make out just like the hedge funds! On the other hand though, I believe a person should give the pros and cons whether bearish or bullish. It’s as if you’re forming a cult like community and only giving one view: bearish! No pros only cons. I myself love to go to the movies, always have and will continue. People that join me on going haven’t changed their mind either. Did you also notice when China recently opened IMAX back up they were fully booked? Why can’t you expect the same for AMC? Oh that’s right, you want them to fail. It’s pretty sad that if I were a business owner and fell on hard times during covid my peers would be sidelining for me to fail. No words of wisdom, no encouragement, just flop! I’ll revisit you when the turnaround of this company happens!
27 Feb. 2021
you are only partially right.

1. The company is not going bankrupt.
2. Cinemas are coming full because you can’t get anywhere else.
3. the loans have been partially converted into shares, ie the loans are reduced.
4. 100% sure that at least here in the Nordic countries the company will be forgiven of debts when the covid ends, because here are the cinemas the only ones that have closed.
5. In the Nordic countries, people have started buying movie tickets even though they don’t know when to even get to the movies .. support the company.
6. Here the government will support companies for which covid causes harm.

I’m not a stock owner, just a side follower, but I support stock owners mentally and I don’t understand short sellers why they are trying to take advantage of the company’s predicament, which is not due to them themselves.
support for the company’s employees as well.
wetdoginvest profile picture
I love it "FINRA's website shows $1.90 billion and 339.07 million shares"... lmao! And the regulators are sniffing around trying to figure out what is wrong with the market.
What a garbage hit piece!
Ed Grey profile picture
@AJames2123 What a useless comment! Are people going to start returning in droves to the movies?

Why is AMC more than a medium-term short or a day-trade on its volatility?
@Ed Grey Okay, okay! Just don't delete your comment; and we will come back to reevaluate our comments this summer. In the meantime, have a good life.
GR Value profile picture
@Ed Grey They could return higher than droves and AMC will still post a heavy loss. That's why buying AMC to hold makes no sense. It's for people who want to gamble. Why it's above $1 is a mystery.
Evan Buck profile picture
March 26 $9 puts going to print money on this once the WSB 2.0 pop fades. Nabbed a couple puts this morning
25 Feb. 2021
@Evan Buck good luck buddy. I bought 2 tickets to see Nomadland in AMC :)
Ed Grey profile picture
@Evan Buck That's a bit shorter term than I like to go. With puts that expire in 2023, you get a huge amount of time value for not that much extra cost.
@Evan Buck oof. This comment didn't age well.
Pacifica Yield profile picture
"Even now it is still unclear if either vaccine actually prevents infections/transmissions."

How is this even remotely objective analysis? Such an epic reach that could have taken 5 minutes to disprove.

25 Feb. 2021
@Winds Research I am from Israel and this is true !
Ed Grey profile picture
@Winds Research Because it's as easy in the USA as it is in a tiny country to inoculate the whole population quickly? And it's as easy to restrict travel, etc.?

What happens when NY says, "Uh oh, I guess it wasn't a good idea to open the theaters when mutant strains are starting up"?
Ed Grey profile picture
@Xterm2000 Yes, it's true. In Israel. The USA is a different story, and different from region to region.

In Israel, are people going to the movies now?

Maybe in the USA, there's a bull case for a new drive-in movie chain this spring? That might work even if few new movies are released for a while.
amc is BULLISH lets go monkeys Hold its about to pop off. bears in your shorts will you stop getting scared and angry that your thesis is wrong
GR Value profile picture
@Mike Kendall Well for now it appears logic means nothing again as AMC is now at 4.6 billion market cap at $10, or over 7 times the pre-covid market cap. And they lost 3 billion since then and can't ever make a profit again.

Looks like an event to redistribute shares that Dalian Wanda and Silver Lake sold. As usual, I would sell this and any rally, before it hit $1 or under within a year.
@GR Value Can you provide the math relating to "7x the pre-covid market cap"? Thanks much-
@Andrew Samalin Outstanding shares have been diluted. Number of shares pre-covid was 104M. There are 339M outstanding shares now.

Market Cap early Feb 2020 was ~0.65B.
0.65B * 7 = 4.55B.

If AMC is at $11 now, its precovid price would be ~$36.

It's ludicrous, but I bought shares this week to hedge my puts. Glad I did.
Kingdom Capital profile picture

Will be right eventually once the post-Covid weakness becomes clear. Not enough retail bagholders to keep it afloat forever. Nice work.

@Kingdom Capital I wouldn’t be so sure about that 😏
Kingdom Capital profile picture
@rcorbi do you think AMC with more debt, less assets and a constant cash burn is worth more than 2x the enterprise value it was before Covid? Cmon man.

What if Amazon or Netflix want to buy? They may view a cinema chain as an attractive option to showcase their numerous movie offerings. Not everyone can afford to subscribe to both for home-based viewing.

bazooooka profile picture

Tail wags the dog on this one. Options market can move the stock. When this ends it'll be a good short, albeit a dangerous one since its a WSB reddit favorite.

GR Value profile picture

@bazooooka I would never short but I totally agree with that assessment. The options market is helping to drive the mispricing. Gamblers in longer dated calls are causing a undeserved premium. In a rational world, AMC would be $1s. Maybe it can be traded to $10 again for another pump and dump I have no clue. If those calls sell and open interest wanes, lookout.

@GR Value

In an otherwise rational world, how many technology stocks could be remotely as high as it stands now? Tesla vs GM likes? People are betting that amc won’t go BK especially after the late saga. While highly speculative play for me, I am glad to participate in for its long term survival and prosperity because my guts tell me that as the cheapest entertainment destination cinema cannot die with a flu-like virus no matter its name. It creates value and deserves a place in the post covid world. Long amc.

Run. Run! Run!! ROFL.

@danforthgs to the movies!
paul13 profile picture




You just drink a Red Bull or something? Calm down......

@paul13 Dude just invest in a better company, OPK has been trash for YEARS haha

@paul13 a stock is worth what shareholders believe in!

Just for those reading....so you know what you're getting into, here's this bloggers sell rating on TipRanks for AMC.

AMC Entertainment AMC - Average Profit On Stock = -19.2%

Chart Of Results If You Would Of Listened To This Guy: snipboard.io/...

You can verify the results here: www.tipranks.com/...

Looks like he's not going to give you an update on when to get out of this one so you're on your own. Don't be a bag holder. Profit responsibly kids!

@wyco researcher - thinking about AMCs Q4 report...with all of the secondary offerings and dilution, won’t the negative EPS be spread across more shares? With the risk being that dilution falls on deaf ears as the negative EPS number is interpreted as an earnings beat? I.e. only -.02 per share vs. -.80 per share or whatever current analyst estimates are.


@Obo521hilarious possibility


@Chancroid considering closing out short and flipping long over this. I don’t see a downside catalyst to push it



It's telling that the price hasn't dropped yet (bears at SA predicted dilution would bring this to $3 fast) - what is it waiting for? That's the question you need to answer......

I'm no financial genius like the author who wrote this article claims to be but you can take a look at recent institutional buyer activity here: https://fintel.io/sob/us/amc

There's an earnings report coming (this week) and the covid re-opening outlook is looking shockingly good right now.

Don't forget - this is the current share price with NY AND CA theaters closed for business still and zero new movie releases scheduled.

Still haven't heard anything about what they're doing about the landlord situation - there might be good news there.

Lots of bad things still in play of course. The debt hasn't changed by much (or did it?)

I mean all the flea market accountants here at SA are using the 2019 figures as gospel and making grand predictions based on these. If 2020 was unexpectedly bad then what's to figure that 2021 couldn't be unexpectedly good?

That's a pretty big unknown to be betting short on.

I am not a financial advisor. This is all my personal opinion.
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