What happened
Shares of AMC Entertainment (AMC 1.61%) were rising 5.5% higher at 10:57 a.m. Wednesday on no company-specific news.
It comes after Disney's latest entry in the Toy Story franchise -- Lightyear -- failed to live up to expectations. A Wall Street analyst also lowered his price target on the stock yesterday, saying rampant inflation and rising gas prices were altering consumer spending priorities.
Image source: Getty Images.
So what
Lightyear had been expected to pull in as much as $135 million worldwide during its debut weekend, but managed to generate only $86 million in total, or what had been anticipated to be its domestic box office.
That slowed down the momentum movie theaters were enjoying as moviegoers came out to see Top Gun: Maverick and Jurassic World: Dominion in droves.
NYSE: AMC
Key Data Points
Whether the Disney bomb is a one-off event remains to be seen, but B. Riley analyst Eric Wold says a "rapidly changing" economic and consumer spending landscape may be more difficult for AMC to navigate.
When consumers are forced to pay more for food and basic necessities, extravagances like a night out at the movies are put on hold. Wold lowered his price target from $16 per share to $11 per share.
Now what
Because AMC is a meme stock, traders really don't care about those things, looking instead to how often the movie theater's shares are being chatted up on social media. That's not a smart way to invest, as a business's fundamentals will always be more important in the long run.
Watching the antics of AMC and the gyrations of its stock from the sidelines is a wiser course to follow.
