Shares of AMC Entertainment Holdings, Inc. (AMC) stock were gaining in the pre-market trading session today on May 11, 2021. AMC stock price saw a surge of 7.08% to reach $10.43 a share as of this writing. It seems that momentum was already built for today as AMC stock went up by 2.42% at previous closing. Let’s see the reason behind this rally.
The current rally is not justified by any specific news or announcement today rather it is the continuation of previous momentum built by the first quarter financial results of 2021 and Chance the Rapper deal with AMC to release the concert film in AMC theaters.
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AMC deal with Chance the Rapper:
AMC stock on May 7, 2021, announced its deal with Chance the Rapper according to which the Grammy-winning musician for the first time will release a concert film, titled Magnificent Coloring World, in AMC theaters. Previously, Chance the Rapper released the holiday concert film on YouTube for free. The theatre industry was greatly suffered by COVID-19 governmental restrictions in the past year and stocks like AMC were forced to close their doors in most parts of the globe. Now the AMC stock is again deriving ways to grow its theatre business and featuring concert film is the one way to achieve its goal.
First Quarter Financial Highlights:
AMC stock revenue decreased significantly by 84% in the first quarter of 2021 to drop at $148.3 million from $941.5 million in the first quarter of 2020.AMC stock suffered a $567.2 million loss in the first quarter which is more than expected by Wall Street. The per-share loss was $1.42 for AMC stock as compared to a loss of $2.22 per share in the same period of the prior year.
Current position of AMC business
Though AMC business suffered greatly due to the outbreak of deadly pandemic in the whole world. Now almost all of AMC’s North American theaters have been opened with limited capacity and cinemas in Europe are slowly moving back to their normal routine. Its sales in the second quarter of 2019 were totaled $1.51 billion but the current situation has forced analysts to estimate the quarterly revenue of less than $1 billion until the last three months of 2021.
So far so good for AMC stock as far as market sentiment is concerned but still great effort is required for the recovery of the overall AMC business in the future. Enough cash on hand is a good sign for AMC stock and hence it can be a good bet for investors in the long run.