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Why AMC Entertainment’s Stock Is Bouncing Around Today

Rich Duprey

What happened

Shares of AMC Entertainment Holdings (NYSE:AMC) fell 6.7% in morning trading on Thursday, but the movie theater operator was clawing its way back after having been down more than 10% early on.

So what

Although there was no news directly related to AMC, yesterday Disney (NYSE:DIS) CEO Bob Chapek told analysts that the old Hollywood movie distribution model was likely dead and buried.

IMAGE SOURCE: GETTY IMAGES.

The experiments movie studios made during the outbreak of releasing big-budget films directly to streaming services or doing day-and-date releases where they simultaneously release films into theaters and to streaming services are here to stay.

Now what

Volatility continues to be the watchword for AMC Entertainment; just the other day, it was spiking 10% higher.

The stock has developed a committed following on Reddit and in other stock chatrooms, and doubting the company’s business prospects can earn you their ire. 

Yet AMC has danced with bankruptcy, and just after gaining the funding it needed to survive at least through the end of the year, it decided to dole out more than $8 million in bonuses to executives. CEO Adam Aron got almost half the total for himself.

Look for AMC stock to continue wildly bounce around, but its business still makes a poor case for a moonshot recovery. This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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