AMC jumps on report Amazon expressed buyout interest

AMC Entertainment's stock is soaring after the U.K.’s Daily Mail reported Amazon expressed interest in buying the movie theater chain. Yahoo Finance’s Dan Howley joins Seana Smith to discuss.

Video Transcript

SEANA SMITH: Welcome back to "The Ticker" here on Yahoo Finance. A potential deal could be on the table. Shares of AMC entertainment are soaring today. The stock is up just around 34% this afternoon. Now this follows a report that Amazon could be interested in buying the company. Dan Howley is digging into this for us. And Dan, I know that you follow Amazon extremely closely for us. What do you think of this potential interest in AMC? I guess, do you think it makes sense from your point of view?

DAN HOWLEY: Yeah, it's not really out of the ordinary per se. I mean, it would be incredible to see them take such a large company and become basically a movie theater chain or owner-- operator of a movie theater chain. But they have flirted with this before. They have released big budget movies to the box office.

They also have, though, their own movies they release on Prime Video. And those may not be seen as much as potentially having them out in the theaters. Remember, they had had "Manchester by the Sea" was one of their big movies. And that had won a lot of awards. So this seems like it would be a natural progression for them almost to ensure that the movies that they are putting out are able to be seen by the widest audience possible.

A lot of people who subscribe to Amazon Prime may not realize they get Prime Video for free. You can also subscribe to Prime Video on its own without also subscribing to Prime for significantly less money. But I think that people would be more apt to see movies produced by Amazon or at least-- the least by Amazon if they were in the theaters.

SEANA SMITH: Hey, Dan, I mean, the question, though, is whether or not this would make sense. Because from AMC's perspective at least, taking a look at their stock, it was near all-time lows. So a buyoff from Amazon at least from their shareholders' perspective, it wouldn't be optimal at this point.

DAN HOWLEY: Yeah, at this point, it would be terrible. I mean, the theaters are closed across the country. There's no way that people can really get in not just across country, internationally because AMC is an international brand. But yeah, I think on their end, it would be terrible just because their stock is off-- well off their highs. I think they were at a high as $32 just in 2015.

The highest they were as recently was back in 2017, but they've fallen off as we've seen fewer people attending movies. We talk constantly about how Hollywood is having harder years. And the only ones that are really doing well are the big blockbusters like the Marvel movies, the Star Wars movies, things along those lines, smaller, more, I guess, you know, mid-range budget movies not doing as well.

So obviously, seeing them, though, down at $5.54 a share is what it's trading at right now, that's just a result partially of the shutdowns, but more in line with the trends that we've seen from movie companies, or at least, movie theater companies. So it may not be the best time for them. But again, you know, the last high was the $30 range around 2017.

So I don't think economic recovery from the virus is going to have much of an impact on their stock price. So it could still be a good time for them to go.

SEANA SMITH: All right, Dan Howley, thanks so much.