Your Guide: Will AMC Stock Rebound?
Are you a movie buff who also loves to invest? Maybe you’re just a simple investor looking to expand your portfolio and stumbled on a movie chain called AMC. Well, in either case, if you’re wondering, “Will AMC stock rebound?”
Today, you’re in luck because we will be answering just that and highlighting a few other cool facts and figures about the world’s largest movie theater chain.
Keep reading to find out more.
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What is AMC?
AMC is the world’s largest movie theater chain, also known as AMC Entertainment Holdings. It has been the world’s largest movie chain for years. To help put things into perspective, think about this. Think about your local movie theater. They will probably have around 10 actual screens to watch movies on. AMC has over 800 movie theaters worldwide, amassing over 10,000 screens. That’s a lot of screen time.
Will AMC Stock Rebound?
What’s Holding AMC Stock Down?
When it comes to improving the value of AMC stock, there are three things that are holding them back. Of course, this is not entirely their fault. As you can imagine, the landscape in how we view movies has changed in the last decade let alone the last 5 years. Can anyone say “Amazon Series?”
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Box Office Revenue
First, let’s look at the most obvious factor, which is sales. Specifically, what’s referred to as “box office revenue” Since the pandemic, many movie theaters across the board have found it challenging to get back on track to pre-pandemic sales numbers.
The market as a whole was forced to stay home on lockdown, which meant that people went through some pretty drastic measures to find ways to keep themselves entertained. When the world opened again, many just grew used to their new norms, which has most likely-effected people wanting to go out to the movies and hurting the sales office.
Debts
Second, we need to look at AMC’s overall debt. As of late 2023, AMC has a whopping $4.5 billion in debt. That’s not millions—literally billions. So, of course, this is going to affect how fast a company can move and attack new opportunities. For even the largest competitor in the field, having this much debt is like running uphill with weights attached to your ankles. At a certain point, it can become too much to manage.
Costs to Operate
Last, we need to look at the costs of operating such a large operation. As you can imagine, being the biggest movie theater chain in the world requires high costs to operate. Remember those 10,000 screens mentioned above? Well, you need employees to operate those. You need people to help collect tickets, help customers, clean the venue, etc.
According to Ibistworld, AMC Holdings has over 30,000 employees! To help show the contrast, nowadays most startups have less than 30. Remember, this does not include the actual utility bills, cost of goods sold, or movie rights for a particular movie release.
How Could They Raise Stock Value?
The main question on everyone’s mind is, “Will AMC Stock Rebound?” As movie lovers, we truly do hope so, but there are going to be some pretty big challenges ahead for AMC. One of the most effective strategies to raise its stock will be by continuing to look for additional revenue streams within its current operation and continuing its advancement in technology. The advancement in technology has to include ways to reduce costs, whether that be by eliminating labor costs or killing what does not sell.
For example, let’s look at when they introduced the self-checkout kiosks. It was a great way for customers to come in, not have to deal with a human, buy tickets, and go. It helped expedite the long lines we were all used to and they cut costs by having just 1-2 attendees versus a team of 10. Multiply that by the thousands of theaters, and there’s a huge cost savings there.
Another example could be if they leverage their huge spaces by partnering with an existing food or café company to provide a “movie and food” vibe. What if they had a cafe setting with bites before or after a movie? People typically go to eat before a movie, so why not capture that revenue by leveraging another company’s resources? Just have them pay you for operating and boom. Passive income.
Conclusion: Will AMC Stock Rebound?
In conclusion, AMC has a long road ahead to stay on top. With investors and Wall Street keeping a heavy eye on their existing debts, many wonder if their stock will rebound. AMC does have a huge competitive advantage as the biggest player in the cinema realm. With the right strategy and innovative thinking, they can get their stock back up and offer a promising future.
