Stocks goin' down!

[MustacheAndaHalf]

There's already threads for GME and TSLA, but not for some of the others I expect will do badly some time this year, so I thought I'd start a new thread.

[MustacheAndaHalf]

My strongest stock picking view is that AMC is headed downwards this year.

Some data first:
(1) AMC ended 2019 at $7.24/share.  Asking Yahoo Finance to summarize each month of prices shows a high of $14.20/sh in April 2019.
(2) Running the monthly query on AMC for 2021 shows $10/sh for the past 3 months.
(3) The 5 year graph of AMC's stock price shows lower peak prices each year.
(4) There were 104 million shares of AMC in April 2020, and there are 450 million shares now.   An article claims they are burning through $100 million/month with $1 billion in reserves.

Based on (1) and (2), it seems like AMC has a similar price now as it did in 2019.  But that's very strange, because from (4) AMC has diluted it's stock by a factor of 4.5x.  Meaning 9 shares today own as much of the company as 2 shares from 2019.  All else being equal, AMC should be trading closer to $2/sh than $10/sh.

Movie theaters break even on ticket sales - they rely concessions like popcorn and drinks to be profitable overall.  But about half of their movie revenue comes from Disney movies, which is why I view Disney+ as the biggest threat to AMC.  Disney released at least one big movie on Disney+ the same day it came out in theaters.  In other words, AMC has zero days of exclusivity for Disney movies.  And if they lose a fraction of their Disney revenues, they go under.  Meanwhile Disney's incentive is to shift more people to it's Disney+ streaming platform, even if theaters go under.

Streaming services grew more in 2020 than any prior year, which pushed several companies to start their own.  I don't know if Paramount's will survive, but I expect Disney+ and Netflix to be leaders - and keep many of their new customers.  All of that is direct competition to AMC, which can't do anything about it.

[ender]

Top was in.

It's over kids, pack it up.

[MustacheAndaHalf]

I disagree in terms of both days and months.  Today AMC is up near $12/sh, and call options are being traded at a furious pace.  I think there's a buying attack going on, and AMC might go up today and tomorrow.

During the pandemic, AMC was closed - nobody expected normal revenues.  I think when AMC revenues get back to normal, people are going to experience sticker shock as they realize how many shares were printed.  The earnings per share will suck.

But not before everyone gets excited about a summer of most people being vaccinated.  I think they'll be a surge in moviegoers, which hints at a surge in revenue.  So I'd guess there will be another surge in prices over summer.

Once AMC has 3 months of normal revenues, I expect their stock to plummet.  They don't have 5x more revenue, but they have (almost) 5x more shares.

[MustacheAndaHalf]

My bullish predictions have done stunningly well, and my bearish predictions tend to be terrible.  I'm making a bearish guess that AMC drops next week.

I bought put options on AMC that expire next Friday, and some expiring 5 weeks from now.  I base that on the outcome of prior buying attacks / squeezes, which push into the weekend and into Monday, then fade away Tuesday.  Very, very small investment so not a big deal either way.