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Right when the pandemic started in March 2020, the stock market crashed. Around the end of March, a friend messaged me, and he was very
Right when the pandemic started in March 2020, the stock market crashed. Around the end of March, a friend messaged me, and he was very excited that the stock price of AMC Theaters had dropped to $2.60 per share, so he told me he bought 200 shares. He said, "They were at $16.43 a year ago! If they go back up, I'm going to make so much money!" Since then, AMC has been on a wild ride of stock price fluctuations because large numbers of newer investors are taking stock tips from social media sites such as Reddit, thereby driving up and down the prices of stocks such as AMC and GameStop. Is AMC's current valuation reasonable? I want you to decide if you think taking stock tips from Reddit a good idea, especially for long-term investment and growth. To do that, I want you to analyze AMC and tell me if you think AMC is a good investment. Take a look at AMC financial statements (TTM stands for "Trailing Twelve Months." You can use TTM in your analysis or use regular fiscal years - it's up to you.). AMC's Income Statement is herelinks to an external site. AMC's Balance Sheet is herelinks to an external site. AMC's Cash Flow Statement is hereLinks to an external site. After accessing AMC's financial statements, please answer the following questions: Give me at least 2-3 ratios from from AMC's latest financial statements (this will be the basis for your response to # 2 below). Based on ratios and the financial statement analysis tools from Chapters 13, do you think AMC is a good investment? Why or why not? (I am looking for accounting reasons, not social reasons.) Please respond to at least one other person's post in a thoughtful and meaningful way. As long as you provide valid, accounting-based support for your position, there are no wrong answers.
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