AMC Theatres Stock Rises After Reports Amazon Might Want to Buy

thewrap.com:

Intersect reported that Amazon was weighing the possibility of adding AMC to its portfolio as the chain’s 600+ theaters in the U.S., Europe and Middle East could be used as part of the company’s campaign to expand the theatrical footprint of Amazon Studios, which is set to release more films like Ben Affleck’s “Air” as full theatrical releases as well as films from the recently acquired MGM like “Creed III.” Following the report’s publication, AMC’s stock saw a 13% increase to $5.15/share at time of closing on Wall Street.

AMC’s stock has plummeted from its meme stock highs in 2021 and is down 82% from a year ago. While increased box office revenue in 2023, driven by more frequent theatrical releases, is expected to improve the bottom line of AMC and other chains, investment firm Wedbush Securities projects that AMC will not report quarterly profits until 2024 even has it has enough cash flow to remain operational through this year.

According to senior Amazon executives who spoke to Intersect, AMC would give Amazon a major cinema network to release potential awards contenders and promote other Amazon products as well as provide access to consumer data from hundreds of millions of moviegoers.

But Wedbush analyst Alicia Reese believes that it is unlikely that an Amazon/AMC acquisition would actually happen, and believes that if Amazon is considering buying a theater chain, it “would be better off” acquiring Cineworld, the parent company of Regal Cinemas which is currently going through bankruptcy proceedings. “Amazon could buy 1,000 screens for $200,000 a screen, or $200 million.