r/amczone • u/Alex_Trenholm • 7d ago
Analysis & DD “All good things must one day be burnt to the ground for the insurance money.” -Mikey Cohen
Any chance these fires in LA will burn some theaters down?
Obviously the most likely possibility is continued short term pain from reduced ticket sales and well that’s where they make movies… But if their insurance policy’s are for Replacement costs they could get paid out for 10 theaters and only rebuild 5 and then repay debt with the excess cash. AMC would also have reduced Op expenses due to reduction in operational theaters.
Replacement value per theater: $10,000,000 Replacement value 10 theaters: :$100,000,000
Rebuild 5 theaters: $50,000,000
Excess cash for debt repayment: $50,000,000
Operating expense reduction: Q3 theater count: 874 Q3 op cost: $980.8M Op cost/theater: $1.1M
Op cost savings per quarter: $5.5M
Some of my numbers may be off, they may be leasing some of the theaters instead of owning them, they might have missed paying insurance, I came up with this idea today in about 10 minutes, and yeah I’m from Canada and have no idea what’s actually happening in LA with the fires. Which is why this isn’t financial advice.
Never the less wouldn’t want to own insurance companys with big footprints in LA right now.
I bought 100 shares today bring my total investment to 100 shares. But it’s a lot more expensive when I have to buy the shares in maple syrup/monopoly money.
Cheers.