AMC Entertainment (NYSE:AMC) stock is on the move today after reaching its lowest level in 52 weeks yesterday, at $6.52 per share. Indeed, fans of AMC stock have unfortunately had front row tickets to the movie theater company’s stock slide over the past year. Yesterday, AMC shares fell a whopping 8%, it’s largest percentage decline since, well, earlier this month. On Nov. 9, AMC dropped nearly 14%.
What’s behind AMC’s bear streak lately?
Despite strong third-quarter financial results, AMC seems to be suffering from the impact of the recent writers’ and actors’ strikes. AMC announced better-than-expected profit and revenue numbers at its earnings call last Wednesday but also warned investors that the ongoing strike would affect the company in 2024. However, soon after, the Screen Actors Guild-American Federation of Television and Radio Artists (SAG-AFTRA) announced a potential strike-ending deal with studios.
That said, just yesterday B. Riley Securities lowered its projections for domestic box office revenue for the remainder of 2023, 2024 and 2025, citing the damage already done by Hollywood strikes.
Additionally, it seems investors are still perturbed by AMC’s sale of up to $350 million in common shares, announced earlier this month. AMC stock fell nearly 20% on Nov. 9 when the company announced it will choose to sell off more of its ownership in order to combat its accumulated debt. This is considered a sign of financial weakness for an already publicly traded business.
AMC Stock on Pace for Yet Another Poor Year
This week has cemented AMC’s struggles. The stock is down 82% year-to-date, and despite enjoying its second straight quarter of positive net income, few analysts have optimistic expectations for the company.
The movie theater business in general is at something of a crossroads. While AMC certainly enjoyed a comeback this year, bolstered by blockbusters like Barbie and Oppenheimer, in general, theaters have long been considered an industry destined to recede. The recent Hollywood strikes have only served to hasten the company’s deterioration.
Commenting on the strikes, AMC Chief Exective Office Adam Aron said:
“There has been and will be much collateral damage from these lengthy work stoppages. For the benefit of all involved in the movie ecosystem, AMC believes this months-long disharmony needs to come to an end now. Whether one thinks of a studio executive or a union member in the creative community, it is ever so important that everyone in Hollywood returns to the task of creating world-class entertainment that is admired and greatly enjoyed the world over.”
That said, AMC fans can at least breathe easy today. AMC stock is up more than 5% at the time of writing.
On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
