AMC (NYSE: AMC) bulls were greeted by some promising news earlier this week when it was revealed that the theater chain’s Los Angeles locations would be reopening, and things just keep getting better.
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The country’s largest theater company announced on Wednesday that it will have reopened 98% of its theaters by this Friday, March 19, with 99% expected to be fully operational by March 26 next week. The news sent AMC stock soaring 4% by market close yesterday.
Why does this matter?
AMC has been faring better than most in terms of the cinema industry’s response to COVID, managing to keep its head above water while securing additional lines of credit that could help see it through this pandemic. And even though it was caught up in January’s notorious GameStop short-squeeze, its stock price volatility has begun to level out a bit — though it is still up 575% year-to-date (YTD) as of market close yesterday.
Should I invest in AMC?
Cinema will continue to be a risky investment, even after COVID-19 passes, but AMC is positioning itself well to become the last-chain-standing when the dust settles, and could perhaps lap up some market share from the demise of others. Considering that it was exactly a year ago that it was forced to close all of its locations, and next week 99% could be open in some way, there is still some hope yet.
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