The box office at AMC Town Square in Las Vegas, Nevada.
Ethan Miller/Getty ImagesMeme stock status aside, AMC Entertainment ‘s movie theaters saw improving foot traffic trends as the 2021 summer movie season kicked off.
Visits to AMC locations in June were down 57.2% from June 2019, according to a report from data firm Placer.ai. That’s the best mark for AMC since the pandemic began, and a remarkable improvement from May, when foot traffic was off 68.8% from May 2019. Foot traffic had been steadily improving on a monthly basis since January, when visits were down 81.9% from January 2019.
“The surge—likely driven by the release of major summer blockbusters and a continued return to ‘normalcy’—could indicate that even a sector like movie theatres could recover,” the report stated. “While there are longer term questions about how the sector may need to evolve to stay relevant, the continued return of visits is an incredibly positive sign for the long term viability of the segment.”
The latest good news for the theater chain is “Black Widow,” Marvel Studios’ first major film release since 2019. The film opened this weekend and has already received a “certified fresh” rating from film critic aggregator Rottentomateos.com, with 81% of the 270 reviews it tracked slanting on the positive side. While “Black Widow” is also available on the Disney+ streaming service, subscribers will need to pay a $30 fee if they want to stream it at home before October.
Despite the good news, AMC stock (ticker: AMC) was down about 3.6% to $46.19 on Friday. The stock is still up 2,078% year-to-date thanks to the meme stock trading frenzy. While we don’t exactly know what moves meme stocks like AMC on any given day, experts have pointed to viral social media chatter, high options volume and short interest, and possibly even sophisticated momentum traders tracking Reddit sentiment. Only 57.4 million shares were traded on Friday—well below AMC’s 65-day average of 155.1 million shares a day.
The stock’s base of retail traders who gather on social media sites like Reddit seeking to thwart hedge funds and short sellers have helped the company sell shares at far higher prices than analysts would have expected. That’s helped the company survive shutdowns.
Still, the company will have to wait a while for another chance to raise funds from stock sales. AMC CEO Adam Aron said earlier this week that after observing that a chunk of investors were against authorizing another 25 million shares that the company could starting selling in 2022, AMC decided to withdraw a planned vote from its annual meeting later this month.
“It’s no secret I think shareholders should authorize 25 million more AMC shares,” Aron said on Twitter. “But what YOU think is important to us. Many yes, many no. AMC does not want to proceed with such a split. So, we’re canceling the July vote on more shares. And no more such requests in 2021.”
Write to Connor Smith at connor.smith@barrons.com
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July 11, 2021 at 09:24PM
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AMC's Foot Traffic Jumped as Summer Movie Season Kicked Off - Barron's
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