Why AMC Entertainment Stock Rose Nearly 10% in Early Trading on July 8

Shares of movie theater operator AMC Entertainment (NYSE: AMC) rose more than 9% in the first half hour of trading on Wednesday. Although the stock gave back some of those gains pretty quickly, it was still up by around 5% at 10 a.m. EDT.

AMC's most obvious problem is that the COVID-19 pandemic has shut down its theaters for months. That near complete lack of revenue, however, gives it another material issue to deal with -- it can't afford the leverage it's carrying on its balance sheet. With a troublingly high financial-debt-to-equity ratio of roughly 15 as of the end of the first quarter, this is a large problem. AMC's ability to survive the pandemic is legitimately in doubt.

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Source Fool.com