AMC’s Foot Traffic Jumped as Summer Movie Season Kicked Off. The Stock Still Declined.

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The AMC Town Square box office in Las Vegas, Nevada.

Getty Images/Ethan Miller

Aside from the current state of meme stock,

AMC Entertainment is a company that produces movies.

As the summer movie season of 2021 began, movie theaters in witnessed an increase in foot traffic. According to a survey from data firm Placer.ai, visits to AMC locations in June were down 57.2 percent from June 2019. This is AMC’s greatest performance since the epidemic began, and it’s a significant increase over May, when foot traffic was down 68.8% from May 2019. Since January, when visitors were down 81.9 percent from January 2019, foot traffic has been progressively recovering on a monthly basis.

“The surge—likely fueled by the release of major summer blockbusters and a return to ‘normalcy,’” according to the paper, “may signal that even a sector like movie theaters could recover.” “While there are longer-term worries about how the sector would need to change to be relevant, the continuing return of visitors is an extremely encouraging sign for the segment’s long-term viability.” “Black Widow,” Marvel Studios’ first major feature release since 2019, is the latest good news for the theater network. The picture debuted this weekend, and Rottentomateos.com has already given it a “certified fresh” rating, with 81 percent of the 270 reviews it tracked being positive. While “Black Widow” is also available on the Disney+ streaming service, users who wish to watch it at home before October will have to pay a $30 fee. Despite the excellent news, AMC stock (ticker: AMC) fell 3.6 percent on Friday to $46.19. Because of the meme stock trading craze, the stock is still up 2,078 percent year to date. Experts have pointed to viral social media discussion, huge options volume and short interest, and potentially even skilled momentum traders analyzing Reddit opinion as factors that swing meme stocks like AMC on any given day. On Friday, only 57.4 million shares were traded, considerably below AMC’s 65-day average of 155.1 million. The stock’s retail trader base, which congregates on social media sites like Reddit to combat hedge funds and short sellers, has aided the company in selling shares at considerably higher prices than experts projected. This has aided the company’s ability to sustain shutdowns. Even so, the corporation will have to wait for another opportunity to collect money through stock offerings. AMC CEO Adam Aron announced earlier this week that the firm had opted to postpone a planned vote at its annual meeting later this month after learning that a significant number of investors were opposed to sanctioning extra 25 million shares that the company may begin selling in 2022. On Twitter, Aron stated, “It’s no secret I believe shareholders should authorize 25 million more AMC shares.” “However, we care about what YOU think. There are a lot of yeses and a lot of noes. AMC does not want to go through with a separation like this. As a result, the July vote on additional shares will be canceled. In 2021, there will be no more such requests.” Connor Smith can be reached at connor.smith@barrons.com./nRead More