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2021-07-30
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2021-07-30
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2 Reasons to Sell AMC Stock
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","listText":"Yes ","text":"Yes","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://laohu8.com/post/808299242","repostId":"2155078999","repostType":4,"repost":{"id":"2155078999","pubTimestamp":1627568710,"share":"https://www.laohu8.com/m/news/2155078999?lang=&edition=full","pubTime":"2021-07-29 22:25","market":"us","language":"en","title":"2 Reasons to Sell AMC Stock","url":"https://stock-news.laohu8.com/highlight/detail?id=2155078999","media":"Motley Fool","summary":"Still bag holding AMC Entertainment? It's time to jump ship.","content":"<p>What goes up must come down -- at least when the rally comes from speculation instead of fundamentals. And while <b>AMC Entertainment</b>'s (NYSE:AMC) shares are still up by over 1,600% year to date, the movie theater operator looks poised for a massive crash because of its deteriorating balance sheet and seismic shifts in the film industry. </p>\n<h2>1. Streaming is the new normal</h2>\n<p>According to the <i>Wall Street Journal</i>, AMC's multi-bagger rally was driven by retail speculation and an intentional short squeeze. Fundamentals play a smaller role, but some investors may also be optimistic about the company's ability to bounce back from the coronavirus pandemic now that 56% of Americans above age 12 are vaccinated. AMC has reopened almost all its U.S. locations. </p>\n<p>But unfortunately, the new normal isn't looking so normal for AMC. </p>\n<p class=\"t-img-caption\"><img src=\"https://g.foolcdn.com/image/?url=https%3A%2F%2Fg.foolcdn.com%2Feditorial%2Fimages%2F635219%2Fgettyimages-900038802.jpg&w=700&op=resize\" tg-width=\"700\" tg-height=\"466\" width=\"100%\" height=\"auto\"><span>Image source: Getty Images.</span></p>\n<p>In July, <b>Disney</b> (NYSE: DIS) released <i>Black Widow</i>, the first Marvel movie to hit theaters since the pandemic. Unlike prior Marvel releases, Disney also made the film available on its streaming platform Disney+ through Premier Access, a service that allows users to rent it for a <a href=\"https://laohu8.com/S/AONE.U\">one</a>-time charge of $30 on top of the service's regular subscription fees. </p>\n<p><i>Black Widow</i> earned $78 million from domestic theaters in its opening weekend compared to at least $60 million from Premier Access. </p>\n<p>The film's success on Premier Access is a terrible trend for the traditional U.S. movie theater industry. Unlike theatrical releases, Disney won't have to split ticket sales with the theaters, resulting in higher profits for the House of Mouse. Online releases also boost Disney's competitive moat against streaming rivals like <b>Netflix</b> and could help drive subscriber growth. </p>\n<p>It is unclear how long Disney plans to continue its dual-release strategy, but if it becomes permanent (or if other studios follow suit), AMC could become an unnecessary middleman in an industry it once dominated. </p>\n<h2>2. Massive cash burn and a deteriorating balance sheet</h2>\n<p>With AMC's future uncertain, investors should pay attention to the company's current performance. That picture isn't pretty. First-quarter revenue tanked 84% to $148 million -- a slight improvement from the fourth quarter (when sales were down 89% against the prior year), but not much evidence of a strong recovery. The company is also burning through cash, reporting negative operating cash flows of $313 million in the period. </p>\n<p>With just $813 million in cash and equivalents on its balance sheet, AMC will probably need to tap the debt and equity markets to sustain operations. And with $5.4 billion in corporate borrowings and $4.9 billion in operating lease liabilities (deferred rent for some of its properties), its balance sheet is already in bad shape. </p>\n<p>Considering these challenges, AMC has no business trading for a market cap of $19.5 billion, which represents a jaw-dropping 43 times its 12-month revenue. Even if the company recovered to its pre-pandemic sales figure of $5.5 billion (which looks unlikely), that would give the stock a price-to-sales (P/S) multiple of 3.5, which is quite a premium for a company with a busted balance sheet that struggled to earn consistent profits even before the pandemic. (AMC reported a net loss of $149 million in 2019.)</p>\n<h2>An obsolete company?</h2>\n<p>The symbiotic relationship between film studios and movie theaters is breaking down. And this could turn AMC Entertainment into an unnecessary intermediary in film distribution. The company's financials are also in shambles, which could mean more debt and equity dilution in the future. AMC's stock shouldn't be trading for such a high valuation in light of these challenges. </p>","source":"fool_stock","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>2 Reasons to Sell AMC Stock</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\n2 Reasons to Sell AMC Stock\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-07-29 22:25 GMT+8 <a href=https://www.fool.com/investing/2021/07/29/2-reasons-to-sell-amc-stock/><strong>Motley Fool</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>What goes up must come down -- at least when the rally comes from speculation instead of fundamentals. And while AMC Entertainment's (NYSE:AMC) shares are still up by over 1,600% year to date, the ...</p>\n\n<a href=\"https://www.fool.com/investing/2021/07/29/2-reasons-to-sell-amc-stock/\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"AMC":"AMC院线"},"source_url":"https://www.fool.com/investing/2021/07/29/2-reasons-to-sell-amc-stock/","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2155078999","content_text":"What goes up must come down -- at least when the rally comes from speculation instead of fundamentals. And while AMC Entertainment's (NYSE:AMC) shares are still up by over 1,600% year to date, the movie theater operator looks poised for a massive crash because of its deteriorating balance sheet and seismic shifts in the film industry. \n1. Streaming is the new normal\nAccording to the Wall Street Journal, AMC's multi-bagger rally was driven by retail speculation and an intentional short squeeze. Fundamentals play a smaller role, but some investors may also be optimistic about the company's ability to bounce back from the coronavirus pandemic now that 56% of Americans above age 12 are vaccinated. AMC has reopened almost all its U.S. locations. \nBut unfortunately, the new normal isn't looking so normal for AMC. \nImage source: Getty Images.\nIn July, Disney (NYSE: DIS) released Black Widow, the first Marvel movie to hit theaters since the pandemic. Unlike prior Marvel releases, Disney also made the film available on its streaming platform Disney+ through Premier Access, a service that allows users to rent it for a one-time charge of $30 on top of the service's regular subscription fees. \nBlack Widow earned $78 million from domestic theaters in its opening weekend compared to at least $60 million from Premier Access. \nThe film's success on Premier Access is a terrible trend for the traditional U.S. movie theater industry. Unlike theatrical releases, Disney won't have to split ticket sales with the theaters, resulting in higher profits for the House of Mouse. Online releases also boost Disney's competitive moat against streaming rivals like Netflix and could help drive subscriber growth. \nIt is unclear how long Disney plans to continue its dual-release strategy, but if it becomes permanent (or if other studios follow suit), AMC could become an unnecessary middleman in an industry it once dominated. \n2. Massive cash burn and a deteriorating balance sheet\nWith AMC's future uncertain, investors should pay attention to the company's current performance. That picture isn't pretty. First-quarter revenue tanked 84% to $148 million -- a slight improvement from the fourth quarter (when sales were down 89% against the prior year), but not much evidence of a strong recovery. The company is also burning through cash, reporting negative operating cash flows of $313 million in the period. \nWith just $813 million in cash and equivalents on its balance sheet, AMC will probably need to tap the debt and equity markets to sustain operations. And with $5.4 billion in corporate borrowings and $4.9 billion in operating lease liabilities (deferred rent for some of its properties), its balance sheet is already in bad shape. \nConsidering these challenges, AMC has no business trading for a market cap of $19.5 billion, which represents a jaw-dropping 43 times its 12-month revenue. Even if the company recovered to its pre-pandemic sales figure of $5.5 billion (which looks unlikely), that would give the stock a price-to-sales (P/S) multiple of 3.5, which is quite a premium for a company with a busted balance sheet that struggled to earn consistent profits even before the pandemic. (AMC reported a net loss of $149 million in 2019.)\nAn obsolete company?\nThe symbiotic relationship between film studios and movie theaters is breaking down. And this could turn AMC Entertainment into an unnecessary intermediary in film distribution. The company's financials are also in shambles, which could mean more debt and equity dilution in the future. AMC's stock shouldn't be trading for such a high valuation in light of these challenges.","news_type":1},"isVote":1,"tweetType":1,"viewCount":333,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0}],"hots":[{"id":808293048,"gmtCreate":1627583698584,"gmtModify":1633758088348,"author":{"id":"3581567858329202","authorId":"3581567858329202","name":"Guru999","avatar":"https://static.tigerbbs.com/b33297748345580d2673abe3f42d908c","crmLevel":9,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3581567858329202","authorIdStr":"3581567858329202"},"themes":[],"htmlText":"Rally?","listText":"Rally?","text":"Rally?","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":0,"repostSize":0,"link":"https://laohu8.com/post/808293048","repostId":"1131613450","repostType":4,"repost":{"id":"1131613450","pubTimestamp":1627570012,"share":"https://www.laohu8.com/m/news/1131613450?lang=&edition=full","pubTime":"2021-07-29 22:46","market":"us","language":"en","title":"Facebook Metaverse, Next Wave Of Growth Opportunities","url":"https://stock-news.laohu8.com/highlight/detail?id=1131613450","media":"seekingalpha","summary":"Summary\n\nMark Zuckerberg discusses metaverse, and why this is the future for Facebook.\nFacebook's Q2","content":"<p><b>Summary</b></p>\n<ul>\n <li>Mark Zuckerberg discusses metaverse, and why this is the future for Facebook.</li>\n <li>Facebook's Q2 2021 results were sizzling hot as it comps an easy period last year.</li>\n <li>Facebook remains very attractively priced, growing at +25% CAGR and priced at 9x sales.</li>\n</ul>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/dcbdc2d6bd0c7b42c807ae560b621aa3\" tg-width=\"1536\" tg-height=\"987\" width=\"100%\" height=\"auto\"><span>atakan/iStock via Getty Images</span></p>\n<p><b>Investment Thesis</b></p>\n<p>Facebook (FB) is still a growth engine with its top-line growing 54% y/y. What's more, as we look ahead, despite the tough comps for H2, Facebook is still likely to grow by at least 25% y/y.</p>\n<p>Further, unlike countless other social media companies, Facebook is unquestionably one of the best money printing companies.</p>\n<p>Facebook's stock is trading for approximately 9x sales. Ultimately, there simply aren't many companies with so much dominance still growing at such a rapid rate priced as cheaply as Facebook. This investment is very attractive.</p>\n<p><b>Revenue Growth Rates Are Impressively High</b></p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/bae2630474c1ccf97169b03a39be3b97\" tg-width=\"640\" tg-height=\"285\" width=\"100%\" height=\"auto\"><span>Source: author's calculations</span></p>\n<p>As you can see above, Facebook's Q2 2021 revenue was up 56% y/y. Having said that, this strong performance in H1 2021 was mostly to be expected, given the easier comps with the same period a year ago.</p>\n<p>However, as we look ahead, considering a 2-year stacked period, where Facebook gets normalized for the COVID period, H2 2021 is expected to decelerate modestly.<i>How modestly?</i>This is the critical question that's very difficult to parse out from Facebook's commentary.</p>\n<p>On the one hand, we know that Facebook has a long history of being incredibly conservative. While on the other hand, we have to factor in the unavoidable uncertainty from iOS privacy updates, as well as, a difficult regulatory environment, most notably in Europe with transatlantic data transfers.</p>\n<p>Altogether, I believe that H2 2021 is likely to continue growing at approximately 25% CAGR. This is a meaningful slowdown from what we saw in H1 2021 but given Facebook's scale, for it to still be able out a mid-20s% CAGR it's praiseworthy.</p>\n<p>Consequently, we can assume that Facebook will likely print $120 billion in revenues in 2021. However, Facebook makes it clear that it's not resting on its laurels, but that it's going to meaningfully invest in the next chapter of its growth story.</p>\n<p><b>Facebook's Next Wave of Growth Opportunities</b></p>\n<p>Facebook is doubling down into making videos the focal point of content creation. Video now accounts for nearly half of all time spent on Facebook, while Reels (TikTok clone) is its largest contributor to engagement growth on Instagram.</p>\n<p>Furthermore, consistent with Facebook's previous messaging to investors, Facebook is now giving creators more ways to monetize their content.</p>\n<p>While Facebook's push into video monetization is different from Twitter's (TWTR) offering, Facebook has taken a leaf from Twitter Spaces, and Facebook is now making a push into audio channels with its Live Audio Rooms.</p>\n<p>Next, Facebook is looking forward to making commerce a bigger part of its family of apps. Facebook is investing in its marketplace solution for businesses to customize their offering on the platform, as Facebook makes businesses' products or services easier to surface.</p>\n<p>Facebook is wanting to improve both customers' and businesses' experience on its platform. But Facebook admits that this is going to take a long time for it to reach a meaningful scale, as its advertising business is so big and accounts for close to 99% of total revenue.</p>\n<p>Accordingly, even its commerce business was to compound at very rapid rates, it would probably still take more than 5 years before a needle-moving revenue source is derived from this opportunity.</p>\n<p>The third area that Facebook believes will drive meaningful growth opportunities is metaverse. So what is the metaverse? This is how CEO Mark Zuckerberg explained it:</p>\n<blockquote>\n <i>It's a virtual environment. We can be present with people in digital spaces. And you can kind of think about this is an embodied Internet that you're inside of rather than just looking at.</i>\n</blockquote>\n<p>This layers augmented reality onto any device offering users a fully immersive virtual experience. The key theme is the broadness of this technology. Going beyond simply communicating with others, users will be able to be present to create, game, exercise, and transact with others.</p>\n<p>Needless to say that all this effort into these products will require meaningful capital investment over a multi-year period, with Facebook's CFO Dave Wehner declare on the call that billions will have to be invested.</p>\n<p>Nonetheless, the stock is clearly very reasonably valued.</p>\n<p><b>Valuation - Very High Quality and Attractively Priced</b></p>\n<p><img src=\"https://static.tigerbbs.com/97a338fa8c3cfa7870d4f7873029655c\" tg-width=\"640\" tg-height=\"382\" width=\"100%\" height=\"auto\"></p>\n<p>Every time I cover Facebook I ask readers to find me a business that has free cash flow margins of 29%. I'm still waiting for a response.</p>\n<p>This implies that for every $1 of revenues, after everything is said and done, Facebook takes out 29 cents in cash. This is cash that gets put directly on its balance sheet or used to repurchase stock.</p>\n<p>Incidentally, to put this cash movement in context, consider the following: Facebook's free cash flow during Q2 2021 reached $8.5 billion. Of that, Facebook repurchased $7 billion worth of stock.</p>\n<p>Investors often retort that Facebook's free cash flow is so strong, because of its heavy stock-based compensation. To that insight, I remark that stock-based compensation is already factored into its market cap valuation.</p>\n<p>Hence, when investors are asked to pay 9x sales for Facebook, investors are already factoring in its stock-based compensation.</p>\n<p>You are welcome to look far and wide, you won't find many businesses growing at 25% CAGR, highly free cash flow generative, priced at 9x sales. If you do, please reach out to me.</p>\n<p><b>The Bottom Line</b></p>\n<p>Facebook continues to plow ahead at an unstoppable pace.</p>\n<p>The commentary around its future growth opportunities was optimistic and honest. While noting that there's a huge opportunity to strengthen user and businesses engagement with Facebook's family of apps, Zuckerberg several times noted that these projects are starting from a very small scale and it will take a long time until they become meaningful contributors to its revenue growth rates.</p>\n<p>Having said that, at 9x sales for a company that's likely to grow at 25% CAGR this year, this stock is incredibly cheaply valued, even after the impressive run the stock has had over the past year.</p>\n<p>However, given the cheapness of many small-cap stocks right now, while nowhere near as dominant and profitable as Facebook, I'm nevertheless going to stick around with those small businesses that are even more attractively priced to me. Happy investing!</p>","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Facebook Metaverse, Next Wave Of Growth Opportunities</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nFacebook Metaverse, Next Wave Of Growth Opportunities\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-07-29 22:46 GMT+8 <a href=https://seekingalpha.com/article/4442466-facebook-metaverse-next-wave-of-growth-opportunities><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Summary\n\nMark Zuckerberg discusses metaverse, and why this is the future for Facebook.\nFacebook's Q2 2021 results were sizzling hot as it comps an easy period last year.\nFacebook remains very ...</p>\n\n<a href=\"https://seekingalpha.com/article/4442466-facebook-metaverse-next-wave-of-growth-opportunities\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{},"source_url":"https://seekingalpha.com/article/4442466-facebook-metaverse-next-wave-of-growth-opportunities","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1131613450","content_text":"Summary\n\nMark Zuckerberg discusses metaverse, and why this is the future for Facebook.\nFacebook's Q2 2021 results were sizzling hot as it comps an easy period last year.\nFacebook remains very attractively priced, growing at +25% CAGR and priced at 9x sales.\n\natakan/iStock via Getty Images\nInvestment Thesis\nFacebook (FB) is still a growth engine with its top-line growing 54% y/y. What's more, as we look ahead, despite the tough comps for H2, Facebook is still likely to grow by at least 25% y/y.\nFurther, unlike countless other social media companies, Facebook is unquestionably one of the best money printing companies.\nFacebook's stock is trading for approximately 9x sales. Ultimately, there simply aren't many companies with so much dominance still growing at such a rapid rate priced as cheaply as Facebook. This investment is very attractive.\nRevenue Growth Rates Are Impressively High\nSource: author's calculations\nAs you can see above, Facebook's Q2 2021 revenue was up 56% y/y. Having said that, this strong performance in H1 2021 was mostly to be expected, given the easier comps with the same period a year ago.\nHowever, as we look ahead, considering a 2-year stacked period, where Facebook gets normalized for the COVID period, H2 2021 is expected to decelerate modestly.How modestly?This is the critical question that's very difficult to parse out from Facebook's commentary.\nOn the one hand, we know that Facebook has a long history of being incredibly conservative. While on the other hand, we have to factor in the unavoidable uncertainty from iOS privacy updates, as well as, a difficult regulatory environment, most notably in Europe with transatlantic data transfers.\nAltogether, I believe that H2 2021 is likely to continue growing at approximately 25% CAGR. This is a meaningful slowdown from what we saw in H1 2021 but given Facebook's scale, for it to still be able out a mid-20s% CAGR it's praiseworthy.\nConsequently, we can assume that Facebook will likely print $120 billion in revenues in 2021. However, Facebook makes it clear that it's not resting on its laurels, but that it's going to meaningfully invest in the next chapter of its growth story.\nFacebook's Next Wave of Growth Opportunities\nFacebook is doubling down into making videos the focal point of content creation. Video now accounts for nearly half of all time spent on Facebook, while Reels (TikTok clone) is its largest contributor to engagement growth on Instagram.\nFurthermore, consistent with Facebook's previous messaging to investors, Facebook is now giving creators more ways to monetize their content.\nWhile Facebook's push into video monetization is different from Twitter's (TWTR) offering, Facebook has taken a leaf from Twitter Spaces, and Facebook is now making a push into audio channels with its Live Audio Rooms.\nNext, Facebook is looking forward to making commerce a bigger part of its family of apps. Facebook is investing in its marketplace solution for businesses to customize their offering on the platform, as Facebook makes businesses' products or services easier to surface.\nFacebook is wanting to improve both customers' and businesses' experience on its platform. But Facebook admits that this is going to take a long time for it to reach a meaningful scale, as its advertising business is so big and accounts for close to 99% of total revenue.\nAccordingly, even its commerce business was to compound at very rapid rates, it would probably still take more than 5 years before a needle-moving revenue source is derived from this opportunity.\nThe third area that Facebook believes will drive meaningful growth opportunities is metaverse. So what is the metaverse? This is how CEO Mark Zuckerberg explained it:\n\nIt's a virtual environment. We can be present with people in digital spaces. And you can kind of think about this is an embodied Internet that you're inside of rather than just looking at.\n\nThis layers augmented reality onto any device offering users a fully immersive virtual experience. The key theme is the broadness of this technology. Going beyond simply communicating with others, users will be able to be present to create, game, exercise, and transact with others.\nNeedless to say that all this effort into these products will require meaningful capital investment over a multi-year period, with Facebook's CFO Dave Wehner declare on the call that billions will have to be invested.\nNonetheless, the stock is clearly very reasonably valued.\nValuation - Very High Quality and Attractively Priced\n\nEvery time I cover Facebook I ask readers to find me a business that has free cash flow margins of 29%. I'm still waiting for a response.\nThis implies that for every $1 of revenues, after everything is said and done, Facebook takes out 29 cents in cash. This is cash that gets put directly on its balance sheet or used to repurchase stock.\nIncidentally, to put this cash movement in context, consider the following: Facebook's free cash flow during Q2 2021 reached $8.5 billion. Of that, Facebook repurchased $7 billion worth of stock.\nInvestors often retort that Facebook's free cash flow is so strong, because of its heavy stock-based compensation. To that insight, I remark that stock-based compensation is already factored into its market cap valuation.\nHence, when investors are asked to pay 9x sales for Facebook, investors are already factoring in its stock-based compensation.\nYou are welcome to look far and wide, you won't find many businesses growing at 25% CAGR, highly free cash flow generative, priced at 9x sales. If you do, please reach out to me.\nThe Bottom Line\nFacebook continues to plow ahead at an unstoppable pace.\nThe commentary around its future growth opportunities was optimistic and honest. While noting that there's a huge opportunity to strengthen user and businesses engagement with Facebook's family of apps, Zuckerberg several times noted that these projects are starting from a very small scale and it will take a long time until they become meaningful contributors to its revenue growth rates.\nHaving said that, at 9x sales for a company that's likely to grow at 25% CAGR this year, this stock is incredibly cheaply valued, even after the impressive run the stock has had over the past year.\nHowever, given the cheapness of many small-cap stocks right now, while nowhere near as dominant and profitable as Facebook, I'm nevertheless going to stick around with those small businesses that are even more attractively priced to me. Happy investing!","news_type":1},"isVote":1,"tweetType":1,"viewCount":119,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":808299242,"gmtCreate":1627583578386,"gmtModify":1633758088595,"author":{"id":"3581567858329202","authorId":"3581567858329202","name":"Guru999","avatar":"https://static.tigerbbs.com/b33297748345580d2673abe3f42d908c","crmLevel":9,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3581567858329202","authorIdStr":"3581567858329202"},"themes":[],"htmlText":"Yes ","listText":"Yes ","text":"Yes","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://laohu8.com/post/808299242","repostId":"2155078999","repostType":4,"repost":{"id":"2155078999","pubTimestamp":1627568710,"share":"https://www.laohu8.com/m/news/2155078999?lang=&edition=full","pubTime":"2021-07-29 22:25","market":"us","language":"en","title":"2 Reasons to Sell AMC Stock","url":"https://stock-news.laohu8.com/highlight/detail?id=2155078999","media":"Motley Fool","summary":"Still bag holding AMC Entertainment? It's time to jump ship.","content":"<p>What goes up must come down -- at least when the rally comes from speculation instead of fundamentals. And while <b>AMC Entertainment</b>'s (NYSE:AMC) shares are still up by over 1,600% year to date, the movie theater operator looks poised for a massive crash because of its deteriorating balance sheet and seismic shifts in the film industry. </p>\n<h2>1. Streaming is the new normal</h2>\n<p>According to the <i>Wall Street Journal</i>, AMC's multi-bagger rally was driven by retail speculation and an intentional short squeeze. Fundamentals play a smaller role, but some investors may also be optimistic about the company's ability to bounce back from the coronavirus pandemic now that 56% of Americans above age 12 are vaccinated. AMC has reopened almost all its U.S. locations. </p>\n<p>But unfortunately, the new normal isn't looking so normal for AMC. </p>\n<p class=\"t-img-caption\"><img src=\"https://g.foolcdn.com/image/?url=https%3A%2F%2Fg.foolcdn.com%2Feditorial%2Fimages%2F635219%2Fgettyimages-900038802.jpg&w=700&op=resize\" tg-width=\"700\" tg-height=\"466\" width=\"100%\" height=\"auto\"><span>Image source: Getty Images.</span></p>\n<p>In July, <b>Disney</b> (NYSE: DIS) released <i>Black Widow</i>, the first Marvel movie to hit theaters since the pandemic. Unlike prior Marvel releases, Disney also made the film available on its streaming platform Disney+ through Premier Access, a service that allows users to rent it for a <a href=\"https://laohu8.com/S/AONE.U\">one</a>-time charge of $30 on top of the service's regular subscription fees. </p>\n<p><i>Black Widow</i> earned $78 million from domestic theaters in its opening weekend compared to at least $60 million from Premier Access. </p>\n<p>The film's success on Premier Access is a terrible trend for the traditional U.S. movie theater industry. Unlike theatrical releases, Disney won't have to split ticket sales with the theaters, resulting in higher profits for the House of Mouse. Online releases also boost Disney's competitive moat against streaming rivals like <b>Netflix</b> and could help drive subscriber growth. </p>\n<p>It is unclear how long Disney plans to continue its dual-release strategy, but if it becomes permanent (or if other studios follow suit), AMC could become an unnecessary middleman in an industry it once dominated. </p>\n<h2>2. Massive cash burn and a deteriorating balance sheet</h2>\n<p>With AMC's future uncertain, investors should pay attention to the company's current performance. That picture isn't pretty. First-quarter revenue tanked 84% to $148 million -- a slight improvement from the fourth quarter (when sales were down 89% against the prior year), but not much evidence of a strong recovery. The company is also burning through cash, reporting negative operating cash flows of $313 million in the period. </p>\n<p>With just $813 million in cash and equivalents on its balance sheet, AMC will probably need to tap the debt and equity markets to sustain operations. And with $5.4 billion in corporate borrowings and $4.9 billion in operating lease liabilities (deferred rent for some of its properties), its balance sheet is already in bad shape. </p>\n<p>Considering these challenges, AMC has no business trading for a market cap of $19.5 billion, which represents a jaw-dropping 43 times its 12-month revenue. Even if the company recovered to its pre-pandemic sales figure of $5.5 billion (which looks unlikely), that would give the stock a price-to-sales (P/S) multiple of 3.5, which is quite a premium for a company with a busted balance sheet that struggled to earn consistent profits even before the pandemic. (AMC reported a net loss of $149 million in 2019.)</p>\n<h2>An obsolete company?</h2>\n<p>The symbiotic relationship between film studios and movie theaters is breaking down. And this could turn AMC Entertainment into an unnecessary intermediary in film distribution. The company's financials are also in shambles, which could mean more debt and equity dilution in the future. AMC's stock shouldn't be trading for such a high valuation in light of these challenges. </p>","source":"fool_stock","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>2 Reasons to Sell AMC Stock</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\n2 Reasons to Sell AMC Stock\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-07-29 22:25 GMT+8 <a href=https://www.fool.com/investing/2021/07/29/2-reasons-to-sell-amc-stock/><strong>Motley Fool</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>What goes up must come down -- at least when the rally comes from speculation instead of fundamentals. And while AMC Entertainment's (NYSE:AMC) shares are still up by over 1,600% year to date, the ...</p>\n\n<a href=\"https://www.fool.com/investing/2021/07/29/2-reasons-to-sell-amc-stock/\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"AMC":"AMC院线"},"source_url":"https://www.fool.com/investing/2021/07/29/2-reasons-to-sell-amc-stock/","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2155078999","content_text":"What goes up must come down -- at least when the rally comes from speculation instead of fundamentals. And while AMC Entertainment's (NYSE:AMC) shares are still up by over 1,600% year to date, the movie theater operator looks poised for a massive crash because of its deteriorating balance sheet and seismic shifts in the film industry. \n1. Streaming is the new normal\nAccording to the Wall Street Journal, AMC's multi-bagger rally was driven by retail speculation and an intentional short squeeze. Fundamentals play a smaller role, but some investors may also be optimistic about the company's ability to bounce back from the coronavirus pandemic now that 56% of Americans above age 12 are vaccinated. AMC has reopened almost all its U.S. locations. \nBut unfortunately, the new normal isn't looking so normal for AMC. \nImage source: Getty Images.\nIn July, Disney (NYSE: DIS) released Black Widow, the first Marvel movie to hit theaters since the pandemic. Unlike prior Marvel releases, Disney also made the film available on its streaming platform Disney+ through Premier Access, a service that allows users to rent it for a one-time charge of $30 on top of the service's regular subscription fees. \nBlack Widow earned $78 million from domestic theaters in its opening weekend compared to at least $60 million from Premier Access. \nThe film's success on Premier Access is a terrible trend for the traditional U.S. movie theater industry. Unlike theatrical releases, Disney won't have to split ticket sales with the theaters, resulting in higher profits for the House of Mouse. Online releases also boost Disney's competitive moat against streaming rivals like Netflix and could help drive subscriber growth. \nIt is unclear how long Disney plans to continue its dual-release strategy, but if it becomes permanent (or if other studios follow suit), AMC could become an unnecessary middleman in an industry it once dominated. \n2. Massive cash burn and a deteriorating balance sheet\nWith AMC's future uncertain, investors should pay attention to the company's current performance. That picture isn't pretty. First-quarter revenue tanked 84% to $148 million -- a slight improvement from the fourth quarter (when sales were down 89% against the prior year), but not much evidence of a strong recovery. The company is also burning through cash, reporting negative operating cash flows of $313 million in the period. \nWith just $813 million in cash and equivalents on its balance sheet, AMC will probably need to tap the debt and equity markets to sustain operations. And with $5.4 billion in corporate borrowings and $4.9 billion in operating lease liabilities (deferred rent for some of its properties), its balance sheet is already in bad shape. \nConsidering these challenges, AMC has no business trading for a market cap of $19.5 billion, which represents a jaw-dropping 43 times its 12-month revenue. Even if the company recovered to its pre-pandemic sales figure of $5.5 billion (which looks unlikely), that would give the stock a price-to-sales (P/S) multiple of 3.5, which is quite a premium for a company with a busted balance sheet that struggled to earn consistent profits even before the pandemic. (AMC reported a net loss of $149 million in 2019.)\nAn obsolete company?\nThe symbiotic relationship between film studios and movie theaters is breaking down. And this could turn AMC Entertainment into an unnecessary intermediary in film distribution. The company's financials are also in shambles, which could mean more debt and equity dilution in the future. AMC's stock shouldn't be trading for such a high valuation in light of these challenges.","news_type":1},"isVote":1,"tweetType":1,"viewCount":333,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0}],"lives":[]}
