Business Proposal

Massimo DeMichele
(586) 707-4629
mcvdemichele@gmail.com
11/13/2022

How to Prevent AMC

STOCK and Profits
from Plumitting
November 13, 2022

Overview
AMC entertainment has had a rough year to say the least reporting another quarterly loss in
the third quarter. With shares falling under 80% investors and shareholders are worried about
the company's future and current Business plan.

After miraculously avoiding

bankruptcy last year due to the meme
stock craze that helped them along
with other companies like Gamestop,
the future for the entertainment
company began to look good. This
helped them make enough money to
pay off some of its millions in debt,
however, the debt came back to bite
them. In a recent effort to pay off debt
and reinvest in its current assets, AMC issued a stock dividend to current shareholders in their
forms of shares which they named “APE”. Even though this was a good idea, the company
couldn’t capitalize fast enough on this and investors pulled their support. In the wake of this, the
stock saw a drastic drop of almost 50% in 2 months. The struggle for the company has been
ongoing since AMC can't seem to make a profit, spending more than they make, specifically
spending 179 million in the third quarter alone amassing a debt total of almost 5 Billion, 2 billion
more than in relation to the value of the market. Provided below are three proposed solutions
to AMC’s stock problem and profit issue.

Proposal
● Provide a “discount night”: With only 4 blockbuster movies to close out the year, AMC
needs a new way to provide consistent profit. I think their best option is by providing a
night of the week where movie tickets are 25% off or even 50%. By doing this you can get
people to come see all types of different movies that they wouldn’t originally see thanks
to the discount. Everyone loves a good discount and providing a great deal on tickets
goes a long way for customers. These small incentives go a long way and once people
get back into theaters and it becomes popular, your concession will stay, making a killing
because only tickets are being discounted.

● Capitalize on Buying Theatres: With recent small sized theaters going under, AMC
should capitalize on buying them for a short prize. By targeting these small theaters they
can generate revenue especially since they can get them for such a low price. According
to a yahoo finance article, the CEO of AMC Adam Aaron, said, "I think there's going to be
an opportunity for us to pick up theaters quite inexpensively and pick up really
high-quality theaters and potentially quite profitable theaters. Right now, because of the
unique position we’re in, that we have liquidity and a lot of our competitors do not, I think
we're going to be able to actually pick up more very fine locations and do it at bargain
basement prices." With the second largest movie theater cineplex going bankrupt, this is
the perfect for AMC to make this jump especially since they closed down over 106
locations during covid.

● Provide Investors with Business Plan: Over the past couple years AMC has struggled
and have continued to dig themselves a deeper and deeper whole in regards to debt.
They have tried so many different strategies to break away from debt and give there
investors hope. However, these actions have all been small short term reactions to
current issues. They need something strong and long term. By providing investors with a
clear and concise business plan that would put them at ease and give them a sense of
trust in the company's leadership, they may begin to see a positive turn around and
continuously support and reinvestments into the company.
Limitations and Resolutions
● Limitation: The only present limitation is the risk of buying out new theaters and having
them not make money. If you do this you could run the risk of burning up more cash that
the company can afford to lose

● Resolution: In order to avoid this, AMC needs to stratical plan the locations they are
purchasing. Possibly do polls in the area amongst the people to see if a theater is even
wanted or see if its the only theater in that area which would be a good incentive to
purchase.

Conclusion
In conclusion, AMC has a number of options when it comes to possibly saving the company
from the downward spiral it's currently in. Some of which are listed above.
 Works Cited
● https://www.cnbc.com/2022/10/12/amc-entertainment-stock-falls-to-52-week-low.html

● https://www.cnbc.com/2022/11/08/amc-entertainment-amc-earnings-q3-2022.html

● https://finance.yahoo.com/news/amc-ceo-says-theater-competitors-running-on-fumes-
may-purchase-locations-at-bargain-basement-prices-131434976.html?guccounter=1&gu
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