- AMC Entertainment surged as much as 21% on Tuesday after a report suggested Amazon might buy the struggling movie theater chain.
- The Intersect reported that Amazon chariman Jeff Bezos ordered his investment advisors to “explore acquisition plans” for AMC.
- AMC has been on a rollercoaster ride ever since it became a target for meme-stock trader in 2020.
AMC Entertainment soared as much as 21% on Tuesday after a report from The Intersect said that Amazon is considering an acquisition of the struggling movie theater chain.
Shares of AMC Entertainment were already up about 5% Tuesday afternoon, but those gains were supercharged after the report from the Intersect was released.
According to the report, Amazon founder and chairman Jeff Bezos has ordered his investment advisors to “explore acquisition plans” for AMC and its 600 movie theater locations. The report cited multiple senior sources familiar with the discussions.
“The thinking is that Amazon can use AMC’s nearly 600 movie theaters across North America, Europe and the Middle East as ‘marketing weigh stations,'” the report said, citing an Amazon insider.
Amazon could essentially use AMC’s movie theaters as a way to promote its slate of Amazon Prime movies, cross-sell other Amazon services such as grocery delivery, as well as serve as a local distribution hub for Amazon products.
Amazon employed a similar strategy when it acquired Whole Foods in 2017.
A potential acquisition would end a tumultuous period for AMC Entertainment, which has experienced a rollercoaster ride over the past two years as it became the target of meme-stock investors on Reddit and other forums. Shares of AMC surged to a record high of nearly $73 in June 2021, but have since dropped more than 90% to $5.29.
Amazon would be able to help AMC service its multi-billion dollar debt pile, which is key given that the movie theater chain is not profitable as the movie box office has yet to reach its 2018 peak of nearly $12 billion. In 2022, the total box US office haul was just under $7.4 billion.
AMC CEO Adam Aron responded to the Intersect in a text message late Monday evening with “we do not reply to rumors and speculation.”
The Intersect is a newsletter published on Substack that was launched about two months ago by journalist Joe Bel Bruno.