Both companies did not immediately return requests for comment, and the report in the Daily Mail that goosed share prices indicated that Amazon’s interest may have waned. It noted, for instance, that it was unclear if talks between the companies were still active.
No matter. Even the hint that the world’s largest theater chain could be snapped up by the e-commerce giant was enough to leave investors salivating. Shares of AMC rocketed roughly 45% in early trading, topping out at more than $5.80.
For Amazon, which has had intermittent success in backing and releasing original films such as “Manchester by the Sea” and “The Big Sick,” owning AMC would give it a showcase for its major releases. Last year, the company started moving away from a traditional theatrical release strategy of screening films in cinemas exclusively for 90 days before debuting them on its streaming service, Amazon Prime. That limited the number of venues that were willing to show movies such as “The Report” and “The Aeronauts.” In the past, Amazon has explored buying a theater chain such as the Landmark, which ultimately was sold to billionaire Charles S. Cohen.
Analyst Eric Wold noted that buying AMC would have strategic advantages for Amazon, but also expressed some skepticism that a deal would take place, noting that the exhibition chain’s stock has been hammered by coronavirus closures.
“We would be surprised if an acquisition down near all-time lows by Amazon in a transaction that would more than likely be for cash (and not stock) would appeal to AMC’s major shareholders,” Wold wrote.