AMC Shares Jump On News of Potential Amazon Deal

According to sources familiar with the discussions, shares of AMC Entertainment Holdings, Inc. Inc rose by as much as 21% on Tuesday due to reports that Amazon.com Inc is considering purchasing the theater chain. The Intersect, an entertainment industry news website, reported that Amazon founder Jeff Bezos dispatched his investment advisers and top entertainment chiefs to explore acquisition plans for AMC. However, both AMC and Amazon have declined to comment on the report.

Last year, Amazon closed its $8.5 billion deal for MGM to strengthen its Prime Video streaming service amidst increasing competition. With the lifting of pandemic restrictions, movie theaters are struggling to draw crowds as people prioritize spending on groceries and rent over out-of-home entertainment due to rising costs.

Wedbush Securities expressed skepticism that Amazon would acquire AMC, given its significant debt and inflated valuation, and instead suggested that Amazon buy United Kingdom’s Cineworld Group Plc, which filed for U.S. bankruptcy protection in September.

AMC has a total long-term debt of $5.17 billion, according to Refinitiv data, and its shares were up 10% at the time of the report. AMC’s market value is approximately $2.4 billion, and it was valued at over $23 billion at the height of the Reddit-fueled surge in June 2021 as one of the famous “meme” stocks.

Share This Article

 

About the Author

AMC Shares Jump On News of Potential Amazon Deal

Prism MarketView