given2invest Posted April 17, 2020 Share Posted April 17, 2020 out of his mind Link to comment Share on other sites More sharing options...
5xEBITDA Posted April 17, 2020 Share Posted April 17, 2020 Stock is rocketing on the news. Bonds are better bid around ~30/33 (vs. ~25 yesterday). No doubt the general market being up helping a lot too. Skeptical that this deal gets done...requires two covenant waivers (one from US lenders and one from foreign lenders) to avoid breaching leverage limits on secured debt (6x!). That is a tall ask, coupled with the fact that I'm really not sure what security you can pledge to these new bonds, but I guess they found some (or taking it away from someone else...!). AMC put out a supplemental disclosure to this noting that they have only enough liquidity through the end of July and that this new bond will give them to Thanksgiving, but that they also don't know if those liquidity estimates are correct and could be a shorter time frame. Link to comment Share on other sites More sharing options...
Guest roark33 Posted April 17, 2020 Share Posted April 17, 2020 Not involved, but some live commentary from citi: $1.3B in the book as of noon (same-day as launch) at 11% (not the 14% quoted below) Good chance of upsizing it due to demand & the company always being open to more liquidity runway If they dont upsize, it will be lower than 11% Link to comment Share on other sites More sharing options...
Guest roark33 Posted April 17, 2020 Share Posted April 17, 2020 At this point, it's really a valuation question. I mean, if you knock off 6 months, you still have to ask, what is the overall value of this company worth. Assuming things go back to normal in the value, is there any equity left, if 600m in value goes out the door from being closed for 3 months and at half speed for the other 3 months. Link to comment Share on other sites More sharing options...
5xEBITDA Posted April 18, 2020 Share Posted April 18, 2020 At this point, it's really a valuation question. I mean, if you knock off 6 months, you still have to ask, what is the overall value of this company worth. Assuming things go back to normal in the value, is there any equity left, if 600m in value goes out the door from being closed for 3 months and at half speed for the other 3 months. Any interesting data point is that the fact the Company wants a waiver for the leverage covenants implies at least a 40% decline in LTM EBITDA. Link to comment Share on other sites More sharing options...
Guest roark33 Posted April 18, 2020 Share Posted April 18, 2020 I mean, I think the waiver for this year is meaningless, of course the ebitda is going to fall off a cliff, they have no revenue. The big question is what happens in the fall/winter. I don't think they have any idea, so why not ask for the waiver now. Link to comment Share on other sites More sharing options...
DanielGMask Posted April 29, 2020 Share Posted April 29, 2020 ‘Trolls World Tour’ Breaks Digital Records and Charts a New Path for Hollywood In three weeks of digital release, ‘Trolls’ sequel has made more money for Universal Pictures than original did during five months in theaters “Universal’s plans to continue experimenting with digital releases drew the ire of the world’s largest exhibitor, AMC Entertainment Holdings Inc. In an open letter Tuesday evening in response to Mr. Shell’s comments in The Wall Street Journal, AMC Chief Executive Adam Aron said his chain would refuse to book any of the studio’s movies as long as it pursues such releases.” https://www.wsj.com/articles/trolls-world-tour-breaks-digital-records-and-charts-a-new-path-for-hollywood-11588066202 Link to comment Share on other sites More sharing options...
Jurgis Posted April 29, 2020 Share Posted April 29, 2020 ‘Trolls World Tour’ Breaks Digital Records and Charts a New Path for Hollywood In three weeks of digital release, ‘Trolls’ sequel has made more money for Universal Pictures than original did during five months in theaters “Universal’s plans to continue experimenting with digital releases drew the ire of the world’s largest exhibitor, AMC Entertainment Holdings Inc. In an open letter Tuesday evening in response to Mr. Shell’s comments in The Wall Street Journal, AMC Chief Executive Adam Aron said his chain would refuse to book any of the studio’s movies as long as it pursues such releases.” https://www.wsj.com/articles/trolls-world-tour-breaks-digital-records-and-charts-a-new-path-for-hollywood-11588066202 Universal is so f'ed! ... ... Wait... ... Actually AMC is so f'ed... Link to comment Share on other sites More sharing options...
stahleyp Posted April 29, 2020 Share Posted April 29, 2020 Wouldn't universal pay 30% to the streaming distributor vs 50% to theater? Obviously streaming is better in that case. Link to comment Share on other sites More sharing options...
txvalue Posted April 29, 2020 Author Share Posted April 29, 2020 Re: the revenue splits I haven't seen anything that shows a company like Universal will consistently make more via PVOD for tentpole movies than the traditional exhibition path. The first Trolls grossed 153m domestically and still had a PVOD period as well as the other deals to offer it on Netflix etc. In this case I think Universal got a bit out over its ski's - Trolls 2 undoubtedly had its numbers juiced by families looking for something for kids to do while on lockdown. It is unlikely a Jurassic Park or Fast and Furious movie makes sense only on PVOD. My bet is that this ends up with AMC shortening the window to something like 50-60 days while paying out a smaller %. A deal like that would also keep the door open for things with other streamers like Netflix. In any event it will all be interesting to watch, Universal seems to be walking their comments back a bit to say only certain titles will be release PVOD. I trimmed my position awhile back, then added again in the high 2's, low 3's and trimmed again today. When I trimmed I rolled the funds into a basket of things but still holding some AMC and have positions built in: Jan 15 2021 $10 Jan 15 2021 $11.45 Jan 15 2021 $15.45 January 21 2022 $12 Still a good chance these expire, but seems like the AMC story is becoming more of a 3x or BK situation so thought this was a way to hold a position with out tying up cash while so many things in the market were on sale. Rolled the rest into CNK & MCS which are up nicely. Still quite a loss & learning experience looking back over my notes on this one. Really appreciate all the commentary from 5x, FT and Given, which helped me sharpen my pencil on things. Link to comment Share on other sites More sharing options...
5xEBITDA Posted April 29, 2020 Share Posted April 29, 2020 Lots of interesting developments for sure...it is interesting to see the price action of the stock vs. the debt. Term loan is still mid-70s, the new 1L bond has dropped to 89 since issue, and the subordinate bonds are all still 20-25. From my high level, not super focused observations of the new issue market, I think the AMC bond is one of, if not the, worst performing new issue to-date. Although with a market cap of ~$550 million underneath all of this debt, the option value of the equity is going to swing wildly with good or bad news. Link to comment Share on other sites More sharing options...
Guest roark33 Posted May 1, 2020 Share Posted May 1, 2020 https://www.sec.gov/Archives/edgar/data/1411579/000119312520131021/d902788dsc13d.htm Not totally sure what to make of the timing of this filing. Silverlake is really underwater on the convert price...odd timing. Link to comment Share on other sites More sharing options...
Guest roark33 Posted May 2, 2020 Share Posted May 2, 2020 The more I look at this, I think Silverlake forgot to file this when AMC told them they were going to pay their convert in shares back in 2019, and now Silverlake was going over their docs and realized it, hence the filing. Any other ideas? Link to comment Share on other sites More sharing options...
txvalue Posted May 11, 2020 Author Share Posted May 11, 2020 Amazon rumored to be kicking the tires on a buyout here. Edit: This was predictably bs and appears to have been about Amazon looking at AMC networks and the paper didn’t catch it. In other exhibition news Cinepolis and members of the controlling family have taken a 8.1% stake in Cinemark per filings. Cinemark sold their Mexican market operations to Cinemex in 2013. Cinemex recently filed Ch. 11 for their US subsidiary. Anyone have any insight into Cinepolis? I haven’t spent much time on the international circuits. Link to comment Share on other sites More sharing options...
MVP444300 Posted June 3, 2020 Share Posted June 3, 2020 https://www.cnn.com/2020/06/03/media/amc-theatres-business-coronavirus/index.html AMC Theatres, the world's biggest movie theater chain, said on Wednesday that it has "substantial doubt" it can remain in business after closing locations across the globe during the coronavirus pandemic. Link to comment Share on other sites More sharing options...
Foreign Tuffett Posted June 10, 2020 Share Posted June 10, 2020 Just skimmed the call transcript. Management says they are burning slightly less than $100 million a month while theaters are shut down. They anticipate having "essentially" all locations open by the time "Tenet" releases, which is currently scheduled for July 17th. $300 million of cash at end of Q1. Let's call that zero since they will burn it all by the end of Q2. Putting aside whatever financing moves they are making, they are looking at $5.1 or $5.2 billion of net debt and finance lease obligations at the end of Q2. That is just a tremendous amount of debt. As previously discussed in this thread, they were already struggling with the debt load prior to COVID. Stock closed today at $6.29. Maybe I am just an old grump, but looking strictly at the fundamentals I have no idea why anyone would want to be long this at the current price. Massive industry uncertainty. Questionable management. Going concern warning. No-growth industry. Studios may be moving away from theatrical distribution somewhat. So on and so forth Link to comment Share on other sites More sharing options...
JRM Posted June 10, 2020 Share Posted June 10, 2020 AMC is popular in the Sherwood Forrest. Link to comment Share on other sites More sharing options...
Gregmal Posted June 10, 2020 Share Posted June 10, 2020 9% a month to short. Rule of thumb, whenever you have a triple digit borrow cost, lower prices are almost a guarantee. Expressing a short here is tough though. Selling ITM calls maybe. Link to comment Share on other sites More sharing options...
Guest roark33 Posted June 12, 2020 Share Posted June 12, 2020 If you sell ITM calls, with this high of borrow costs, they will most likely get assigned to you as a short position. Link to comment Share on other sites More sharing options...
Foreign Tuffett Posted June 13, 2020 Share Posted June 13, 2020 Just skimmed the call transcript. Management says they are burning slightly less than $100 million a month while theaters are shut down. They anticipate having "essentially" all locations open by the time "Tenet" releases, which is currently scheduled for July 17th. $300 million of cash at end of Q1. Let's call that zero since they will burn it all by the end of Q2. Putting aside whatever financing moves they are making, they are looking at $5.1 or $5.2 billion of net debt and finance lease obligations at the end of Q2. That is just a tremendous amount of debt. As previously discussed in this thread, they were already struggling with the debt load prior to COVID. Stock closed today at $6.29. Maybe I am just an old grump, but looking strictly at the fundamentals I have no idea why anyone would want to be long this at the current price. Massive industry uncertainty. Questionable management. Going concern warning. No-growth industry. Studios may be moving away from theatrical distribution somewhat. So on and so forth "Tenet" release pushed back to July 31st Link to comment Share on other sites More sharing options...
Guest roark33 Posted June 13, 2020 Share Posted June 13, 2020 Wonder Woman pushed back to October. Mulan will probably be pushed back a month. Some other movies being shifted from fall to next year, Matrix being moved from 2021 to 2022. It's just going to be a long slog ahead for AMC. They really need the unsecured to accept the exchange so they can reduce their interest payments with the PIK Notes. Link to comment Share on other sites More sharing options...
Foreign Tuffett Posted June 15, 2020 Share Posted June 15, 2020 Wonder Woman pushed back to October. Mulan will probably be pushed back a month. Some other movies being shifted from fall to next year, Matrix being moved from 2021 to 2022. It's just going to be a long slog ahead for AMC. They really need the unsecured to accept the exchange so they can reduce their interest payments with the PIK Notes. Yeah, upcoming big budget releases keep getting pushed back. AMC is has no control over release dates and opening its US cinemas too far in advance of the first big budget movie release would only serve to burn cash more quickly. This situation is partially an artifact of the bifurcation that we've seen develop in the movie industry in the last few years: Most big budget movies still go to cinemas, but lower budget movies (like Adam Sandler's recent stuff) go to streaming first. Way back in 2005 I was dragged to see "Must Love Dogs" -- truly a traumatic experience. These days a lower budget romantic comedy like that would go straight to streaming. This situation means that cinema chains are very reliant on a relatively small number of big budget films. Anyway, this headline says it all: "Box Office: The Summer Movie Season Is Essentially Canceled" https://www.forbes.com/sites/scottmendelson/2020/06/13/box-office-summer-movie-season-essentially-canceled-mulan-tenet-spongebob/#54e0bc85258c Link to comment Share on other sites More sharing options...
Guest roark33 Posted June 18, 2020 Share Posted June 18, 2020 https://www.cnbc.com/2020/06/17/amc-facing-creditor-resistance-on-proposed-debt-swap-report-says.html?__source=LinkedIn%7Cmain Looks like Einhorn bought some debt Link to comment Share on other sites More sharing options...
Spekulatius Posted June 18, 2020 Share Posted June 18, 2020 Way back in 2005 I was dragged to see "Must Love Dogs" -- truly a traumatic experience. LOL, mine was “Stuck Everlasting“ It predates yours, but I still recall the feeble plot line as if I have watched it yesterday, Link to comment Share on other sites More sharing options...
Jurgis Posted June 18, 2020 Share Posted June 18, 2020 Way back in 2005 I was dragged to see "Must Love Dogs" -- truly a traumatic experience. LOL, mine was “Stuck Everlasting“ It predates yours, but I still recall the feeble plot line as if I have watched it yesterday, You guys just don't understand movies. ::) #SleeplessInSeattle-BestMovieEver Link to comment Share on other sites More sharing options...
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