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AMC’s Stock Hits Record Lows Amid Declining Box Office and Strikes

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AMC Entertainment

AMC Entertainment Holdings Inc (NYSE: AMC) shares are currently trading at their lowest levels ever.

Despite a reverse split and briefly reaching $12 on Monday, the stock continues to decline.

However, it’s not just short-term issues affecting AMC’s performance. According to analyst Rich Greenfield, the company’s APE shares, devised by CEO Adam Aron, have not had the desired impact.

Greenfield mentioned on Monday that box office revenues are still down 15% compared to 2019, and the release schedule is being affected by strikes. He also noted that AMC’s 2024 film lineup appears weaker than 2023.

Both statements are accurate. AMC’s domestic box office revenue is already 14.7% lower than in 2019, and the situation may worsen due to ongoing strikes in the entertainment industry.

Let’s delve into this further.

AMC Faces Challenges from Strikes and Movie Delays

The entertainment industry is currently grappling with strikes, starting with the Writers Guild of America and followed by the Screen Actors Guild-American Federation of Television and Radio Artists (SAG-AFTRA), representing approximately 160,000 professionals in Hollywood.

These strikes have caused a halt in film and television production worldwide, impacting award shows and box office revenues.

SAG-AFTRA, with a 98% approval rate for the strike, is demanding better pay and working conditions, especially in light of industry changes. Their concerns include reduced residuals, stagnant wages, and potential misuse of artificial intelligence in replicating performances.

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Movie Delays Causing Chain Reactions: Greenfield specifically highlighted the decline in box office prospects for the fourth quarter of this year, which is reflected in the numerous release date delays. Several high-profile movies and TV shows, such as β€œChallengers” starring Zendaya and Quentin Tarantino’s upcoming film β€œThe Movie Critic,” have already announced postponements.

Aside from immediate challenges, Greenfield also mentioned concerns about the future outlook. He believes that AMC’s 2024 film lineup appears weaker compared to 2023. As a result of the strikes, studios are struggling to secure strong portfolios for the future.

Delayed productions like β€œKraven the Hunter,” β€œBad Boys 4,” and the next installment of the β€œMortal Kombat” series highlight the potential difficulties AMC may face next year.

AMC’s profitability heavily relies on filling theaters, particularly with blockbuster movies that drive concession sales. However, strikes and rescheduled releases are undermining this business model, leaving a grim future for the theater chain.

To survive in an industry undergoing significant changes, AMC will need to adapt or find alternative lifelines.

Current AMC Stock Situation: According to data from Benzinga Pro, AMC’s shares are trading 3.97% lower at $11.98.

Read Next: Asia Up, Europe Up, Commodities Up – Global Markets Today While US Was Sleeping

Photo via Shutterstock.

Source: Benzinga.com

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