Why AMC Entertainment Is Rising Today – Motley Fool

What happened

Shares of AMC Entertainment Holdings (NYSE:AMC) were rising 7% in late afternoon trading Monday after the movie Free Guy did better than expected at the box office over the weekend. 

Because the Walt Disney (NYSE:DIS) movie was not available on its Disney+ streaming service, the strong showing indicated there was still demand among moviegoers for films, which could be a harbinger of good tidings for the industry.

Women at a dine-in theater

Image source: AMC Entertainment.

So what

Although certain Disney films like Black Widow are being released simultaneously, or even exclusively, to the streaming service, Free Guy was not one of them. It is being shown exclusively in theaters for 45 days before moving to HBO Max, the AT&T (NYSE:T) streaming service.

Recently AT&T’s Warner Bros. studio signed an agreement to guarantee a 45-day window of exclusivity for its movies released after 2021, similar to agreements signed with other theater operators. If movies like Free Guy can do well without streaming competition, then others can do so as well.

Now what

AMC, of course, tends to move with more volatility than most other stocks, including other movie theater stocksCinemark was trading less than 2% higher today while Imax was down less than 1% — because of its meme stock status. 

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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