[fairity]

> But in general, I think there’s good evidence that non-box office releases depress overall revenue (Mulan). Big studios want to be in theaters.

I do buy this.

> It’s not in the movie industry’s interest to let AMC fall.

But, I don't buy this. AMC going bankrupt doesn't mean theaters go away. In all likelihood, AMC would live on as a new corporation after paying out creditors in the bankruptcy process.

An AMC bankruptcy actually seems like a best case scenario for the movie industry. After relieving itself of debt, AMC can afford to lower prices (due to a lower cost structure). And, lower prices means more ticket sales and more studio revenue.

> In the above article AMC said they didn’t want to run ads (non-trailer) before the movie. There’s a lot they can do.

Definitely agree here, but all these opportunities existed prior to the pandemic. So, I'm wondering how you can justify the appreciation in valuation over this period. Was AMC just severely underpriced prior to COVID?

[runawaybottle]

This is the part where I’m going to bust out some stock astrology. We need to trade AMC on sentiment outlook (and by sentiment, I mean literal feelings), not fundamentals.

Pre-pandemic there was little reason to put AMC in the same field of view as other growth stocks. It was visible along a completely different angle, that of a ‘declining industry, streaming will eat it’s lunch’. That’s where people crunched the numbers.

It’s been realigned with beaten up stocks now, and positioned in the same field of view of ‘recovery’. In fact, I’d also say it’s positioned now to answer the question of ‘Will steaming kill the movie theater?’. If they can survive a pandemic and regain attendance, then we get some serious answers about this business versus the one dimensional view of Netflix/Amazon just eradicating them pre-Covid.

In short, fundamentals don’t mean much for this stock right now. It’s set up to answer bigger questions. Will people go back to movies? Will people travel? Is remote working here to stay? We can’t crunch numbers for questions like this yet.

So I think it’s good to trade on sentiment right now and once we have answers about where things stand after the shuffle, we can go ahead and evaluate it’s exact price.

BUT, all bets must go in now. The sentiment will be priced in well before we ever get to their first real earnings report in the post pandemic world.