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Why AMC Stock Is Up Today

By Joe Tenebruso – Updated Sep 13, 2021 at 4:37PM

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A major announcement from a moviemaking titan could aid the theater chain's recovery.

What happened 

Shares of AMC Entertainment Holdings (AMC -4.26%) rose on Monday after Walt Disney (DIS -2.94%) said it would release its upcoming films exclusively in theaters for the rest of this year. 

As of 1:22 p.m. EDT today, AMC's stock price was up more than 4%. 

So what

With many theaters forced to close during the early stages of the pandemic due to social distancing guidelines, Disney began to release some of its movies on its popular Disney+ streaming platform. Even after health officials eased COVID-19 restrictions and theaters began to reopen, Disney made some of its biggest blockbusters available on Disney+ on the same day they hit theaters.

However, following the impressive box office performance of Shang-Chi and the Legend of the 10 Rings, Disney is returning to its traditional theater-first release strategy.

People watching a movie in a theater.

Image source: Getty Images.

Now what

It's easy to see why Disney reversed its approach. The entertainment giant's latest Marvel film has already grossed almost $250 million during just its first two weeks in theaters. These surprisingly strong results show that people are returning to theaters in droves, despite the prevalence of COVID.

A recovery in theater traffic is certainly good news for AMC. Rebounding attendance could help boost sales at a time when the theater chain is struggling to service its burdensome debt load.

Moreover, Disney's decision to prioritize theater releases could drive other studios to do the same with their forthcoming films.

Joe Tenebruso owns shares of Walt Disney. The Motley Fool owns shares of and recommends Walt Disney. The Motley Fool has a disclosure policy.

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Stocks Mentioned

AMC Entertainment Holdings Stock Quote
AMC Entertainment Holdings
AMC
$7.19 (-4.26%) $0.32
Walt Disney Stock Quote
Walt Disney
DIS
$95.96 (-2.94%) $-2.91

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