Let’s All Go To The Movies?
Dear Wall Street Daily Reader,
To go to the movies, or not to go to the movies? That is the question.
Whether ‘tis nobler in the mind to suffer the slings and arrows of judgmental people shaming you for going out to see the new Tom & Jerry movie, or to take masks and vaccines against a sea of infections and by opposing … end them.
To popcorn? To butter? No more! And by butter to say, we eat the entire bucket before the movie begins. Ay, there’s the rub!
Shakespeare? Really? Do you bite your thumb at me, Mr. Great Stuff?
I do bite my thumb, sir, but not at you, oh Great Ones! For I serve as good a market as you. And that market has decided that AMC Entertainment (NYSE: AMC) should rally.
Why, you ask? Pray thee, give me leave to elaborate.
New York City hath decreed that on March 5, theaters may open their doors with limited capacity. And AMC is taking advantage of this decision to open all 13 of its NYC locations.
“Gov. Cuomo’s announcement that movie theaters can reopen in New York City in the first week of March is another important step towards restoring the health of the movie theatre industry and of our company,” sayeth AMC CEO Adam Aron.
If you remember way back on January 26, I said:
The more I watch the market’s reaction to AMC’s painful throes at the hands of streaming, the more I’m convinced that AMC could win big post-pandemic … if it can avoid bankruptcy for now.
So far, that prediction is coming true.
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AMC has avoided bankruptcy, craftily taking advantage of the January Reddit rampage by selling 13.3 million shares and raising $304.8 million. Flush with more stability than it had months ago, AMC is now poised to actually win big post-pandemic.
The reopening of NYC theaters is the first step toward that end.
But you said that theaters are dying due to streaming. What gives?
True. Theaters will not be quite the same in this new streaming world. Many will fall by the wayside as new releases go direct to streaming. However, places like AMC offer an experience you can’t get at home … and I’m not just talking about mortgaging your home to buy buttered popcorn.
Although, if you are braving the pandemic to go see the Tom & Jerry movie … you deserve the lead role in Macbeth. Seriously. Just watch the old cartoons. They’re so much better — frying pans to the face and all.
Anyway, for other releases — you know, films that more than six people will go see — the cinema experience won’t die completely.
I mean, seeing Star Wars In IMAX with Dolby Digital THX surround sound with a theater full of like-minded Star Wars fans just can’t be replicated at home. (And if you can replicate this at home, umm … can I come over and hang out?)
Will there be fewer theaters? Probably. But that also means that there will be less competition for AMC.
Will there be less revenue for AMC? Also probably.
However, AMC is still worth more than its current deathbed valuation. The company will survive, and it will come out of the pandemic leaner and better capitalized than when it went in.
In fact, AMC may be one of the best “buy the dip” post-pandemic plays on the market … that is, if you’re waiting around for cinemas to come back to begin with. Right now, everyone who’s anyone is knee-deep in the streaming shebang.
You won’t find Great Stuff scooping up any cinema shares anytime soon … because we’ve already staked our claim right in the heart of the streaming market.
In fact, Great Stuff Picks readers already stand on a gain of nearly 400% on our streaming play!
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Until next time, be Great!
Editor, Great Stuff