Author Topic: AMC - AMC Entertainment Holdings  (Read 9293 times)

txvalue

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Re: AMC - AMC Entertainment Holdings
« Reply #20 on: May 23, 2019, 12:10:25 PM »
given2invest thanks for the reply - I'd be interested to know your answer to my question a few posts above so you could clarify your EBITDA numbers.

2020 certainly looks like a down year vs this year.  2015 was a record box office year and everyone was worried for 2016 because of a lack of blockbusters. When the dust settled 2016 set another record because of the strength of the lower budget movies while the top movies were down 3% year over year.  History may not repeat itself, but the industry is a more resilient than its given credit for, even in recessions and 2021 is shaping up nicely for big movies.

As for the subscription model if industry chatter and other executives are talking about A-List pulling away attendance from their theaters I think there is something interesting to that. To your point this new attendance may in fact be less profitable at the moment but remember only half of the current A-List members were in AMC's loyalty program before so it is drawing in a new customers as well.


johnny

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Re: AMC - AMC Entertainment Holdings
« Reply #21 on: May 24, 2019, 12:00:27 PM »
2020 box office gonna be a disaster compared to 2019.  Also there is no proof the subscription business is value add vs. pre subscription model.

And the CEO is one of the worst in the world.   

Hard pass.

Love beating up on this guy.

I think the subscription thing is a big winner (AMC's offering is structurally going to be the best, and the winner-take-all dynamics are strong). But they ultimately still have to figure out how to retain a decent share of the surplus and not end up just being a pass-through for studio profits. In other words, you can't afford to just have a steady-goes-it CEO sitting there and let the business handle itself. You need a guy who you are confident can figure out a win-win deal with studios that doesn't leave AMC high-and-dry and searching for ways to desperately push utilization down.

They're basically price-takers for the DisneyPixelMarvelLucasFox slate, and Disney can periodically check on on AMC's 10-Qs to figure out how to aggressively to reprice.
« Last Edit: June 07, 2019, 02:04:43 PM by johnny »

txvalue

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Re: AMC - AMC Entertainment Holdings
« Reply #22 on: June 06, 2019, 08:55:10 AM »
Johnny,

I agree with your points, all valid. As for Given2Invest I think your earlier numbers are incorrect, it looks like you (or someone else) may have posted the incorrect number narrative on another site and been corrected there.

I look at AMC this way - how often do you get a chance to buy a company that could have 2019 EBITDA that matches its current market cap?

The theatre business is resilient during recessions and as you noted their subscription offering is very likely to become the most popular for the foreseeable future.

If I am Silver Lake I am trying to figure out how to buy out Wanda and take this thing over. Aron has made some interesting comments Re: Silver Lake and when they will convert shares and the timing of that and I wonder if there is a little smoke/fire there. Of course it could also just be Aron being Aron.

« Last Edit: June 07, 2019, 07:39:32 AM by txvalue »

txvalue

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Re: AMC - AMC Entertainment Holdings
« Reply #23 on: June 07, 2019, 07:41:10 AM »
One other interesting note, the stock had dropped 12 straight days before today. A user on twitter spoke with IR and AMC said that the new (non cash) accounting change that shows leases as debt on the balance sheet was interpreted incorrectly by financial sites like Bloomberg. I haven't been able to verify this but yesterday Bloomberg listed AMC's debt chart on their website and today this chart for AMC has been removed while other companies still display normally.

If this is true then computer models have been causing heavy selling for the past two weeks and it would explain the divergence from other consumer/theatres stocks that has taken place with no corresponding negative news. Another example of Mr. Market presenting opportunities for those investors paying close attention.
« Last Edit: June 07, 2019, 07:43:34 AM by txvalue »

5xEBITDA

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Re: AMC - AMC Entertainment Holdings
« Reply #24 on: June 07, 2019, 07:43:04 AM »
I don't buy that excuse. How dumb does IR think the market / computers are? FWIW, I've spoken with AMC's IR team lots of times before and they are not that bright.

given2invest

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Re: AMC - AMC Entertainment Holdings
« Reply #25 on: June 07, 2019, 09:01:06 AM »
lol at that explanation

txvalue

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Re: AMC - AMC Entertainment Holdings
« Reply #26 on: June 07, 2019, 09:05:23 AM »
I get that the stock is not popular and you all may be right that the excuse/explanation is weak.

I still like to hear other thoughts and opinions on the company considering it is down so much with the outlook looking reasonable over the next 3 quarters.

Given2Invest you are back - I'd love a response to my question about your EBITDA numbers earlier in the thread.

given2invest

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Re: AMC - AMC Entertainment Holdings
« Reply #27 on: June 07, 2019, 09:21:27 AM »
I didn't respond to your EBITDA question because you already knew the answer; I was off by a little bit but the pro forma #s from 2016 or whatever didn't include EBITDA from a $1B EU acquisition either. 

I have no idea why the stock is down.  I am not involved and wouldn't be at any price.  The risks are numerous, namely the CEO is a complete buffoon and can't be trusted.

Silver Lake got a sweetheart deal with the convert.  It has a reset function and, if it resets, AMC can only take it out w/ cash if they pay them a 15% IRR.

The box office over the next 18 months will not outperform.  2020 very likely might be a disaster given the slate.  There is huge operating leverage in this business.   Disney controls essentially the entire box office.  They are about to launch a streaming service that will take some of their content direct to TV.   They will also have tremendous leverage over the exhibitors w/ price. 

Currently AMC has no deal w/ Disney or anyone else on how subscription should work.  I think this is very risky.  They are just paying them full ticket prices.  Hey, at least if the box office is terrible, they should make a lot on the subscription business as people don't go to the movies!

johnny

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Re: AMC - AMC Entertainment Holdings
« Reply #28 on: June 10, 2019, 12:32:14 AM »
I just want to note, as somebody who has been using the product quite a bit, a few bullish observations (not enough to make me long just yet)

1. The quality of the overall experience (From the app design to the reliability of the back-end to the relatively seamless check-in process in-theater) has really impressed me. You really don't expect to see something so well executed from a non-software company. It's not a trivial set of things going on here either, and I've yet to experience any sort of failure or hiccup. Maybe this is one of those things where the top-level guys are so incompetent it actually creates a sort of distraction-free paradise for mid-levels to get things done. Maybe they just lucked out when they threw a dart at the contractor board.

2. All of us being autistic penny-pinchers, we may fail to give full credit to the food/beverage angle of this business. I suspect there may be something going on here where somebody getting "free" admission to the theater imagines they are now starting off at a -$12 cost and have some house money to play with in the concessions area. Somebody in my family at least.

3. Assuming they're never able to work out some sort of special pricing deal for subscription admissions with the distributors (which I do), I suspect they'll have quite a bit of room to change up the shape of the offering, not just on the price side but on the admissions as well. Once you have exploited the word of mouth and reached as many subs as possible, I think you can choke back from 3 to 2 showings per week and really not lose many customers, etc. I was quite shocked to see just how many customers stuck with Moviepass despite its monumental failures and panicky revamps of the actual product offering.

Foreign Tuffett

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Re: AMC - AMC Entertainment Holdings
« Reply #29 on: June 10, 2019, 06:10:31 AM »
I continue to think that A-List's popularity is, in part, due to it being significantly under priced:

A-List members get both Stubs Premiere benefits + earn Stubs Points on their monthly membership charges. I calculated last year that the latter benefit alone is worth $48 in Stubs points annually.   


Earlier this year I bought two tickets to see "Avengers Endgame" in a premium-type theater for $18 each. Another couple with A-List paid $0 for tickets to the same showing.

Let's assume they saw 1 more film that month (@ $10 ticket price). Let's also assume a 50/50 theater/studio split. Finally, let's assume 1 moviegoer instead of 2:

Not A-List:
($18 ticket + $10 ticket) * 50% take = $14 to AMC (and $14 to studios)

A-List
$20 monthly subscription fee - $14 to studios = $6 to AMC


Don't even get me started on AMC's economics for A-List members that are seeing 1 or more movies a week.