AMC Entertainment (NYSE: AMC) stock has been struggling in penny-stock territory for most of this year, with only 14 days of trading outside of this realm. Despite a few brief spikes, it seems unlikely that meme-stock investors will see a repeat of the 2021 revival they’re hoping for.
While I typically have a negative view of AMC stock, it’s important to consider potential events that could turn the stock around. Recent reports from Bloomberg suggest that AMC is working to reduce its debt and extend maturities, easing some near-term financial pressure.
However, simply pushing debt obligations further out may not be a lasting solution for AMC. The company still faces significant challenges, with high operating lease payments adding to its financial strain. While restructuring debt can provide temporary relief, it does not address the underlying cash flow issues.
Ultimately, AMC will need to explore new revenue streams beyond traditional theater-related sources to truly escape its current predicament. Despite efforts to rework debt, the company may continue to struggle, leading to its ongoing status as a penny stock.
Disclaimer: The opinions expressed in this article are those of the writer and do not reflect any positions held by them in the mentioned securities. Will Ashworth has been writing about investments since 2008 and has contributed to various publications in the US and Canada.