AMC Profits Will Soar If It Can Follow GameStop With This 1 Move

AMC Entertainment (NYSE: AMC) and GameStop (NYSE: GME) have at least one thing in common: The stock of both companies has been caught up in a buying frenzy this year that's led to their share prices rising at least 950% in 2021.

The remarkable increase in the stock price has created a situation where their valuations are divorced from their operating performance. Even before the pandemic, the companies were struggling to grow revenue, and pandemic-related economic lockdowns hurt their businesses even more.

With the price jump, the management of both companies saw an opportunity to raise equity by selling additional shares of stock. GameStop used the funds raised to help eliminate long-term debt. If AMC can do the same, it would help its profits soar.

Source Fool.com