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Why AMC Entertainment Stock Is Lighting Up the Market Today

By Rich Duprey – Dec 21, 2021 at 7:08AM

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"Spider-Man: No Way Home" is proving to be a massive winner at the box office.

What happened

Shares of AMC Entertainment (AMC 2.15%) were running 5% higher in morning trading Tuesday as the latest installment of the Spider-Man franchise obliterated box-office estimates with a $260 million opening weekend.

It was the largest opening for a film in the pandemic era and was second on the all-time list behind Avengers: End Game, which generated $357 million in box office receipts during its 2019 opening weekend.

Image from Spider-Man: No Way Home

Image source: Sony Pictures.

So what

AMC investors have argued that once Hollywood returns to form, producing quality entertainment, the movie theater operator will be able to survive because there is substantial latent demand among would-be moviegoers for good films.

Sony and Disney (DIS 1.09%) teamed up to produce the much-anticipated Spider-Man: No Way Home and stayed focused on simply telling a good story centered on one of the most popular Marvel characters. AMC announced last Friday that the movie had produced the theater chain's biggest December opening night ever, with 1.1 million people ushered in. 

Now what

Spider-Man is a global success, outperforming in every market it's being shown in. It earned nearly $601 million worldwide in its opening weekend and has generated nearly unanimous critical accolades, with a 94% critics rating on Rotten Tomatoes and a 99% fan rating.

That's the kind of movie-making AMC will need more of if it is going to overcome the relentless downward pressure that its business has experienced, despite being the best-performing stock on the stock market in 2021. Shares of AMC are now up 1,300% for the year with about seven trading days remaining

Rich Duprey has no position in any of the stocks mentioned. The Motley Fool owns and recommends Walt Disney. The Motley Fool has a disclosure policy.

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