I get a lot of questions on AMC Entertainment (AMC) as the meme stock crowd continues to buoy the shares despite the underlying business continuing to burn millions of cash per day, so let’s update the numbers behind the equity since my last post on the topic was seven months ago. From a fundamental perspective, the business itself remains in the red despite being open for business, so I think continuing to value the theater chain based on 2019 actual results is a fair way of taking an optimistic view of the future (assuming normalcy eventually does return to everyday life). AMC owns fewer locations now than they did in 2019, but inflation can probably offset enough that we can safely use the $670 million of 2019 EBITDA in this exercise. To refresh, here is what the numbers looked like back at year-end 2019, when things were (relatively) good for the company: Cash: $265 million | Debt: $4,753 million Share Count: 104 million | Stock Price: $7.24 Equity Value: $753 million | Enterprise Value: $5,241 million EBITDA: $670 million | EV/EBITDA multiple: 7.8x The stock has now moved up to above $46 while the share count has nearly quintupled. Using the 6/30/21 balance sheet (and 2019 actual EBITDA), here are the updated figures: Cash: $1,811 million | Debt: $5,500 million Share Count: 513 million | Stock Price: $46.09 Equity Value: $23,644 million | Enterprise Value: $27,333 million EBITDA: $670 million | EV/EBITDA multiple: 40.8x As you can see, the stock price today has nothing to do with fundamentals, but that statement has been echoed plenty of places. Long term, a short position here will almost certainly pay off, but the timing is the big question mark. AMC has been able to stay out of bankruptcy so far by selling more than 400 million new shares over the last 18 months. Even at their first half 2021 cash burn rate (~$3.2 million per day), they had 18 months of cash in the bank at the end of June. Therefore, the story as we head into and traverse 2022 is where the next influx of capital comes from in order for them to roll over their debt, repay deferred rent from the pandemic (around $400 million and not included above) and get back to cash flow positive operationally. It seems like a long shot that existing creditors would be excited to dole out more funds, so additional stock sales, if allowed by the shareholder base, is the best bet for next year. If credit gets tight, however, and investors balk at buying more stock, the tide could shift pretty quickly. Still, we don’t (and can’t) know the timing, even though the end result looks pretty obvious; the business almost certainly can’t sustain a $27 billion E/V on its own, and it likely can’t service $5.5 billion of high-cost debt either. Grab your popcorn, as the next 12 months should be very entertaining. Full Disclosure: Short shares of AMC at the time of writing, but positions may change at any time