GameStop vs. AMC Entertainment: Which Is the Better Stock?
First, let's take a look at GameStop $GameStop(GME.US$ . The video game retailer currently has a robust cash position of $908 million. It's also virtually debt-free.
Because of this, GameStop was able to pay off nearly all of its outstanding debt position and still keep about $1 billion in cash.
Still, GameStop isn't content to remain idle. The company has a plan to put its capital to work by strengthening its fulfillment capacity and advancing its digital-focused turnaround plan.
Therefore, GameStop's considerable cash hoard will offer it some extra cushion, should macroeconomic conditions get worse.
Last quarter, GameStop used about $380 million in cash to support its operations. That's a 15% reduction from the previous quarter, but the situation needs to improve further. At the current pace, GameStop could put its balance sheet in jeopardy and even run out of cash as soon as next year.
On the other hand, AMC Entertainment $AMC Entertainment(AMC.US$ $AMC Preferred Equity Unit(APE.US$ has a more complicated situation regarding its balance sheet. AMC carries a high debt load of about $10.4 billion and a cash position of $904 million.
Even with high debt, the movie theater chain has managed to achieve a stable liquidity position. Recall that AMC issued new shares in January and June 2021. The June issuance program generated about $587.4 million for the company's cash flow. This allowed AMC to avoid bankruptcy.
However, AMC is determined to repay its high-interest loans and deferred rent. Last quarter, the company refinanced approximately $941 million in debt, paying 7.5% on these funds, with the principal due in 2029.
The scenario of high-interest rates and inflation tends to impact more severely leveraged companies. Therefore, those that have low debt loads and more relevant cash positions tend to be less affected. That's not AMC's situation.
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Doug Saddler : In what delusional world are you fools deciding that AMC is the better stock?
Andrea Zia Doug Saddler: they don't have an nft marketplace lmao!
M1ke1229 :
M1ke1229 : could you imagine if all positions shifted from GME to AMC?..
Doug Saddler Andrea Zia: And AMC has *checks notes*
A Boomer CEO in bed with Citadel and diluting the stock by half a billion shares and lessening retail's voting power
An unprofitable silver mine (???)
An overpriced popcorn business on the side with no incentive to purchase among other competitive brands
Reliant on movie sales/concessions in an economy that's headed to a very bad recession where movies will be one of the first things cut out of a budget
No digital platform or exclusive content driving customers to their theatre other than proximity.
Meanwhile the NFT Marketplace that is still in Beta has already proven to be successful with millions of dollars in transactions (all of which GME gets a percentage of), exclusive content, and sold more than the entire existence of OpenSea within the first quarter.
I hope you enjoy your bags
Doug Saddler M1ke1229: Or vis versa...
M1ke1229 Doug Saddler: yeah, this is true.It won't happen tho because we are all dedicated to our stocks,But I still think we all shouldn't be against one another.We all share a common goal
NopeNOTTODAYJR : both junk
ANC Investments : I'm thinking of the future and the gamer world is much more expensive. Movies are getting easier and easier to watch online and amc is way behind on that level but gamestop has a large portion of the store front gaming market.
Giovanni Ayala : True
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