Yahoo Finance Live examines AMC shares after Amazon's invests in in-person movie releases for its content.
DAVE BRIGGS: My play is AMC. Oftentimes, we discuss that stock moving on relatively nothing, traded as merely a meme stock. Not the case today, though. Shares soaring on reports that Amazon plans to invest a billion dollars a year to produce 12 to 15 movies for release in theaters. The plan will reportedly start in 2023 with a smaller number of releases and then wrap up the following years.
Earlier this year, Amazon closed its $8.5 billion purchase of MGM Studios. Industry estimates suggest this could boost domestic box office receipts by between 15% and 20%. The strategy a 180, frankly, from fellow streamer Netflix, who has, for the most part, steered clear of theatrical releases, with today, though, being a very notable exception when the "Knives Out" sequel, "Glass Onion," is released for just one week, though, before they pull it out and then put it on Netflix.
Shares of AMC up about 7% on the day. Still, though, down 70% year to date. The question is, Rachelle, are we bullish, are we bearish, on movie theaters? I am not a believer in their long-term survival. Just not enough theatrical releases, even with Amazon getting in this game. What do you think?
RACHELLE AKUFFO: I mean, the thing is, it doesn't have to just be a theatrical release. It has to be worthy of people going to the movies. Not every movie, not every rom com, you need to go to the movie theater. So we got very comfortable in the pandemic. We got comfortable with the streaming.
So this is an interesting move by Amazon, 12 to 15 theatrical releases. Obviously, AMC did need the boost. It was considered a meme stock for a very long time. I'm just not convinced. I mean, Amazon really hasn't put that much into original film production so far. So I want to wait and see about this one. I'm not convinced at this point, though.
DAVE BRIGGS: Sounds like we agree on that.