AMC plans shopping spree: 'There will be more Hycrofts'
AMC Entertainment plans to acquire or invest in more companies that are outside of its main theater business, its CEO Adam Aron said Monday.
Why it matters: AMC wants to transition from being a theater company to a full-blown conglomerate.
- "Those who think of AMC just in terms of the company that existed pre-pandemic are looking through a rearview mirror at the past," Aron said. "As we build a new AMC and grow our way, through value-creating initiatives, there will be more Hycrofts ahead."
By the numbers: AMC's losses are shrinking. The company reported a net loss of $337.4 million during the March quarter, an "improvement" from losing $567.2 million a year ago.
- AMC's stock closed down 9% Monday at $12.52 amid a broader market sell-off. Shares have fallen more than 50% in 2022 and are off more than 68% in the past six months.
- But Aron argued that their $28 million investment in Hycroft is more than paying off: "At a time when the NASDAQ is off 9% of overall value, our investment in Hycroft Mining has increased by more than 30% as of Friday's closing price."
Yes, but: Hycroft's stock price has doubled since the year began, but it closed Monday at $1.28 a share — lower than when AMC made its investment back in March.
Be smart: The theatrical business is still AMC's main priority, and the box office is primed for a comeback this year led by multiple big-ticket blockbuster films.
- "Sonic the Hedgehog 2," "The Batman" and this weekend's "Doctor Strange in the Multiverse of Madness" have so far proved that the theater can still draw boffo box office numbers.
- That portends good things for the rest of the year, with sequels to "Top Gun," "Jurassic World," "Thor," and new "Minions" and Pixar ("Lightyear").
- AMC has been an active buyer of theaters as well. Aron said it now owns one-third of the former Arclight-Pacific Theater group and three-fifths of Bow Tie Cinemas locations.
What's next: AMC is getting into the retail popcorn business later this year and will start selling its popcorn outside the theater in retail stores, malls, grocery stores and via home delivery from local theaters.
- "We plan to be deliberative and disciplined in investing in opportunities to enhance our existing business or to diversify into previously unexplored markets," Aron said.