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Why AMC Entertainment Is Rising Today

By Rich Duprey – Aug 16, 2021 at 4:17PM

Key Points

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The theater industry had some good news over the weekend.

What happened

Shares of AMC Entertainment Holdings (AMC -10.37%) 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 (DIS -0.15%) 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 (T 0.68%) 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 stocks -- Cinemark was trading less than 2% higher today while Imax was down less than 1% -- because of its meme stock status. 

Rich Duprey owns shares of AT&T. The Motley Fool owns shares of and recommends Walt Disney. The Motley Fool has a disclosure policy.

Stocks Mentioned

AMC Entertainment Stock Quote
AMC Entertainment
$6.05 (-10.37%) $0.70
AT&T Stock Quote
$19.30 (0.68%) $0.13
Walt Disney Stock Quote
Walt Disney
$92.15 (-0.15%) $0.14
Cinemark Holdings Stock Quote
Cinemark Holdings
$12.02 (-4.68%) $0.59
IMAX Stock Quote
$15.75 (-2.48%) $0.40

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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