AMC Entertainment (AMC) slowly built an uptrend after bottoming at the height of the pandemic hurting markets in March 2020. By mid-June, the stock broke down for two reasons. First, the infection rates started rising in many states, threatening the re-opening. Second, AMC delayed its theatre re-opening. Move release delays are another reason for the stock’s drop.

AMC is less risky than a bet after the financing deal but it also lacks any near-term catalysts. On July 13, AMC secured $300 million in new funding. It cut debt by $460 million to $630 million. The improving debt profile, lower cash flow burn, and liquidity remove short-term bankruptcy risks. To rebound from here, AMC needs lockdowns ending and infection rates in the U.S. under control. Until that happens, movie attendance may potentially underwhelm.

The weak movie attendance will discourage companies like TimeWarner (T) and Disney (DIS) from releasing blockbuster movies until later. This will hurt AMC’s revenue rebound potential in the next few weeks.

AMC is a good long-term bet for investors who believe the movie theatre business will recover. The chain will limit attendance and enforce physical distancing upon reopening. When it wins customer trust, attendance will grow steadily.