AMC’s Rollercoaster Ends in Bankruptcy? 🎢💥

Remember those wild days when AMC was the king of meme stocks?

AMC, once the shining star in the meme stock universe, is now facing some serious backstage drama. Recent headlines are shouting about its debt reduction efforts, but instead of a happy ending, we're looking at more shareholder dilution. Translation? It’s like watching your favorite movie get a disappointing sequel.

AMC’s saga is far from over, but trust me, it’s not looking like a blockbuster. The latest news reveals that AMC is negotiating with lenders to reduce its $4.5 billion debt. If they can't pull a rabbit out of the hat, we might see a Chapter 11 bankruptcy, wiping out common stockholders.

But wait, there’s more! 

The movie industry hasn’t fully recovered, and AMC’s fortunes are still on shaky ground. Even with a short-lived optimism about the industry, AMC's stock didn’t quite join the rally. The future box office results might not be the ticket to save AMC.

AMC’s debt saga continues, with negotiations to lessen future losses rather than lead to a rebound. A high debt position leaves the “saga” surrounding shares at risk of reaching the “final chapter,” a Chapter 11 bankruptcy reorganization. If AMC were to enter Chapter 11, it would almost certainly lead to a total wipeout for anyone holding the company’s common stock.

Recent headlines about AMC’s debt restructuring efforts point to continued shareholder dilution. As Bloomberg reported on June 21, AMC has recently been negotiating with its lenders about both ways to reduce debt and extend near-term maturities. AMC’s long-term debt currently stands at around $4.5 billion, $2.8 billion of which comes due two years from now.

If AMC’s future box office results remain underwhelming, AMC is likely to experience further declines. Trading for just under $5 per share today, a slide to the low single-digits could take shape in the coming months.

Although the situation with AMC hasn’t taken a big turn for the worse, it certainly has not experienced much improvement. A lack of news may keep shares rangebound for now, but the next encore of big losses may be approaching.

AMC’s next quarterly earnings release is a little over a month away. Besides reporting another quarter of poor operating results, the company could provide an update on its debt restructuring plans. Although anything’s possible, and said update could end up being better-than-feared, it may be best to play it safe. If you currently own AMC stock, consider it time to exit the theater, immediately.

So, what's happening with the GBP/USD? Well, after the Bank of England decided to leave interest rates untouched in June, the Pound has been on a bit of a sideways journey. Inflation is cooling down, and everyone’s eyes are on potential rate cuts in August.

Meanwhile, the US Dollar is doing a little dance, influenced by Federal Reserve Chair Jerome Powell’s upcoming speech and the ever-exciting non-farm payrolls report.

Right now, the Dollar has seen a modest bounce, thanks to market jitters about a possible second term for Donald Trump. However, there’s a balancing act going on, as the Fed is expected to start cutting rates in September.

Technically speaking, GBP/USD is battling around its 50- and 100-day moving averages. It’s like watching a tense scene where you can’t predict the outcome. If Sterling bulls want a comeback, they’ve got their work cut out for them.

The British Pound was weaker against the United States Dollar on Tuesday but overall continues the sideways trading which has dogged it since the Bank of England’s June policy meeting. That resulted in no change to interest rates, but inflation seems to be relaxing quite markedly now and the market won’t be surprised to see borrowing costs fall in August. This prospect is naturally keeping a lid on any upside for Sterling across the board and not just against the Dollar.

However, this week’s focus is likely to be on the ‘USD’ side of GBP/USD, with Federal Reserve Chair Jerome Powell due to speak later in the day, and minutes from the last rate-setting meet due for release on Wednesday.

These will set the scene for Friday’s blockbuster – the official non-farm payrolls report.

For its part the Dollar has seen a modest bounce as markets continue to fret the uncertainties attendant on a possible second Presidency for Donald Trump, with the prospect of increased tariffs should he return giving benchmark bond yields a boost and hurting risk appetite.

Still, the market remains reasonably confident that the Fed will start cutting its own interest rate in September, and, although it’s likely to proceed cautiously from there, the prospect also keeps Dollar bulls in check.

For now Sterling is on the back foot, although it has pared some of the losses seen earlier Tuesday in Asia. The UK’s General Election will take place on Thursday, but it seems to be having little effect on the currency, with victory for the opposition Labour Party in the price.

Technically, GBP/USD is clearly struggling with a downtrend in place since mid-June, trading ranges have narrowed into a new month and retracement support at 1.26212 seems to be the limit of bearish ambition in the short term. The pair is now trading around both its 50- and 100-day moving averages, with a solid rise above those levels likely to see more consolidation.

Sterling bulls will have their work cut out to get back to the highs above 1.26972 which dominated trade between May and mid-June. A return to those levels would be positive for the Pound but doesn’t look likely. Below those levels, the resumption of that downtrend will remain the most likely course for Sterling this week, even if falls are not deep.

While this week’s big US events are likely to see some trading opportunities on GBP/USD, they’re unlikely to produce enduring moves unless they alter current interest-rate views.

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