Forget AMC Entertainment. Here Are 3 Better Recovery Stocks
AMC Entertainment (NYSE: AMC) has become a darling of investors on the Robinhood trading platform and among users on Reddit in recent months. The sudden interest in the movie theater operator has sent share prices skyrocketing this year, up nearly 400% year-to-date.
After the company got an infusion of cash to avoid filing for bankruptcy protection, some investors now believe the company's value will surge on a wave of pent-up demand later this year as Americans return to pre-pandemic activities like going out to a movie. One possible example of that underlying demand: AT&T's Warner Media film Godzilla vs. Kong brought in $48.5 million over the five-day holiday weekend, and it was a hit on AT&T's HBO Max as well (where it was released simultaneously).
However, after AMC's price surge in recent months, the stock is already double where it was trading pre-pandemic, and investors have been significantly diluted by an increase in shares issued. Additionally, the company has been forced to take on high-interest debt. The dilution and increased debt burden will both weigh heavily on any recovery in the business.
Source Fool.com
