AMC (NYSE:AMC) blew earnings estimates out of the water yesterday. The earnings call saw the company post far better numbers than anybody expected, and it also allowed Adam Aron to make a big announcement for the company regarding its accepted payment methods. However, some still seem to be unconvinced. In fact, short-sellers are daring to open up more put calls against AMC stock still, even in the face of retail traders who rabidly buy stock in order to squeeze the air out of shorts.
Jim Chanos, founder of Kynikos Associates and an infamous short-seller, is entirely unconvinced of AMC. The trader is making his opinions known in an interview with CNBC. Chanos says he has a put position open on AMC stock and cites the company’s weak fundamentals as reason.
Jim Chanos Unconvinced by AMC Stock, Even After Big Earnings Day
AMC did crush its earnings yesterday. It posted better numbers than analysts predicted, including beating revenue predictions by some 15%. It also had some major news to boot; CEO Adam Aron says the company will accept Bitcoin (CCC:BTC-USD) before the end of the year. Chanos is unimpressed, though. He says that beating low expectations does not give him a positive outlook for the theater chain.
Beyond this, Chanos also touts streaming as a cinema-killer. “The reality is that things have gotten worse at this company,” says the investing magnate. “So clearly something has changed. And that change is streaming.”
Is Chanos right? AMC certainly doesn’t think so. As Adam Aron put it quite eloquently in yesterday’s call, there have been many other “cinema-killers” in the past, and none of them lived up to bears’ claims:
“TV was going to kill off movie theaters. VCRs was going to kill off movie theaters. DVDs were going to kill off movie theaters. Each time, movie theaters proved resilient. Americans went to a movie theater 1 billion times in 2019.”
Chanos might have his reasons, but AMC stock holders are bound to remain unconvinced. And with the way retail investors can initiate short squeezes out of spite, there’s no wonder why he allowed his put to be just 1% of Kynikos’ total assets.
On the date of publication, Brenden Rearick did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
