(Reuters) – AMC Entertainment Holdings Inc’s shares rose 9% on Tuesday as retail traders fueled another rally in the theater operator’s stock following its better-than-expected quarterly results and a deal with Warner Bros to delay same-day streaming releases.
AMC was the top trending stock on social media site Stocktwits, and its share price rose to $37 in premarket, recovering some of a $20 dip since early June and valuing the company at 15 times what it was in January.
While the results topped Wall Street estimates, the company still posted a huge loss as theater chains worry that the Delta variant could derail a nascent recovery.
Chief Executive Officer Adam Aron said on Monday the company struck a deal with AT&T’s Warner Bros to allow a 45-day theatrical window for movies before their streaming release from 2022, instilling some hope for ticket sales going ahead.
Films such as the “The Batman”, starring Robert Pattinson, and Jason Momoa’s “Aquaman and the Lost Kingdom” are some of the awaited Warner Bros releases next year.
The exclusive theatrical window is crucial to box-office collections and has been at the heart of a years-long dispute between theater chains and studios, which are looking to make money out of their fast-growing streaming operations and take on powerful providers like Netflix.
“We are actually in dialogue, active dialogue with every major studio,” Aron said.
The company said U.S. ticket revenue in the third quarter was on track to reach 45% of the same quarter in 2019, and Aron also played to social media-savvy investors by promising to accept bitcoin as payment for tickets this year.
“We would like to think that someday when a movie is filmed about AMC and COVID, its title will be one compelling word, ‘Recovery.’ But, only time will tell,” Aron said.
Most Wall Street analysts covering the stock argue that the company is far over-valued, with the median price target on the stock at $3.70 – about a tenth of its last close.
Of the nine analysts covering the stock, five recommend “hold”, while four have a “sell” or lower rating, according to Refinitiv Data.
(Reporting by Eva Mathews in Bengaluru, additional reporting by Medha Singh; Editing by Saumyadeb Chakrabarty)
