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As of November 2021, AMC Entertainment Holdings, Inc. is the global leader in the theatrical exhibition business. The company, through its subsidiaries, operates over 950 theatres with more than 10,500 screens throughout the United States, Europe, and other international markets. The company has revolutionised how movies are watched and experienced, with its iconic ‘megaplex’ theatres featuring state-of-the-art sight and sound systems, power-recliner seats, as well as a wide selection of assorted foods and beverages. AMC was founded by Maurice Dubinsky, Edward Dubinsky, and Barney Dubinsky in 1920. The company is headquartered in Leawood, Kansas, US.
AMC started its journey as Dubinsky Bros. and only acquired the current brand name in the late 1960s when its name changed to American Multi-Cinema Inc. Throughout its history, AMC has pioneered several innovations in the theatre business. In the 1960s, the company introduced the first multiscreen theatre that was dubbed ‘multiplex’. The concept seemed extravagant at the time, but it was actually the opposite – theatres were able to spread their costs by sharing infrastructure and employees. In the 1980s, the company was credited with the introduction of cup-holder armrests in theatres as well as automated projection systems.
The decade was also the most successful for the company, as annual attendance consistently hit the 1 billion mark, and AMC ramped up expansion to international markets such as Europe, Australia, and Singapore. But this rapid growth also came with a huge debt load. Furthermore, the business environment started changing with new movie-watching channels cropping up. The advent of the internet made it easy for the company to sell its tickets, but as new video streaming services became the trend, AMC is now facing new challenges in the 21st century.
AMC Entertainment Holdings, Inc. went public on December 18th, 2013, listing on the NYSE, where its stock trades under the ticker symbol AMC. The stock is categorised in the Communication Services sector, under the Entertainment industry.
AMC Stock History
AMC went public with an IPO price of $18. The company has never implemented any stock splits in its history (as of November 2021). The AMC stock initially drifted upwards and managed to hit a temporary peak at circa $36 in March 2015. The stock then faced headwinds and edged lower to circa $20 by January 2016. A brief recovery then followed that year, with the AMC stock hitting the $35 mark by December 2016.
As video streaming services promoted the staying at home movie culture rather than movie-going, AMC stock embarked on a long-term downtrend that kept it firmly below the $20 price area. When the 2020 coronavirus-inspired Great Lockdown started, AMC’s business was completely shut down, and the AMC stock then tumbled to its all-time low below $2 in January 2021.
Amazingly, the AMC stock would become part of the so-called ‘meme stocks’ in early 2021. The term referred to stocks that were driven by internet frenzy rather than business fundamentals. A young enthusiastic investor base decided to take on aggressive Wall Street investors who were betting on the collapse of the AMC stock. The result was a short squeeze, which subsequently made AMC one of the best-performing stocks in 2021. From below $2, AMC stock sharply jumped to its all-time high above $62 by June 2021. The stock has since retreated from those heights and currently trades around the $40 area.
How to Trade AMC Stock
Here are some of the factors to consider when trading AMC stock:
- Legislative and Taxation Issues – AMC has operations in about 15 countries, and the nature of its business leaves the company vulnerable to changes in legislative and taxation issues. The company deals with legal concerns such as privacy and data collection, safety and security of moviegoers, as well as partnerships and contract agreements with production houses. As well, AMC has to navigate different taxation regimes in the different jurisdictions that it operates in.
- Consumer Preferences – In the 21st century, the company has had to deal with the monster challenge of consumers preferring online streaming services to offline movie going. This trend was enhanced during the 2020 Great Lockdown when movie lovers were forced to take up subscriptions with various video streaming services. It remains to be seen whether the movie-going culture will resume in the post-COVID-19 era, but this will remain a big headache for AMC.
- Competition – AMC is a leader in its industry, but it still faces competition from other theatrical exhibition businesses such as Regal, Cinemark Theatres, Cineplex, and Harkins Theatres. Competition is based on pricing, loyalty programs, movie titles, style, and design, as well as ambience and foodstuffs. There is also competition from online streaming services such as Netflix and YouTube that offer on-demand entertainment videos to users.
- Periodic Earnings Reports – The AMC fiscal year runs alongside the calendar year, from January 1st to December 31st. The company releases periodic earnings reports to update investors on their business performance. The most important metrics to watch out for in AMC earnings reports include attendance numbers, total revenues, and total debt. Positive numbers can inspire higher AMC stock prices, whereas negative figures can trigger lower stock prices.
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