AMC Gets Lift on Revived Amazon Acquisition Rumor

AMC shares get a boost after a months-old story that speculated that Amazon would acquire the theater operator was republished.
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AMC Entertainment  (AMC) - Get Report got a jolt on Thursday on revived speculation that the Amazon  (AMZN) - Get Report would buy the world’s biggest chain of movie theaters.

Shares of the Leawood, Kansas company had jumped as much as 19% before the bell. They at last check were up 2.9% to $5.71.

The stock-price spike was reportedly sparked by the publication of a months-old report that appeared in Forbes France. The American version of the story was published last May.

Both versions of the story said the possibility of an Amazon acquisition was "pure speculation." The two companies reportedly have held talks about a potential takeover.

Movie-chain operators were among many businesses that had been battered by the coronavirus pandemic shutdown. 

Streaming video has radically changed the film industry by offering subscriptions to watch original films and television shows at home and on the go.

Last month AMC was caught up in a Reddit-fueled share-price rally that pushed its stock up more than fourfold in a matter of days. Retail investors also bought shares of the company on Tuesday.

Reddit posters were less enthusiastic on Thursday, with one saying "this is old news from May last year!"

"Yeah, year old rumour and it seems unlikely because streaming services are stealing market share away from movie theatres, so I’m not sure where the investment value is," another said.

AMC said in January that it had raised $917 million in debt and equity, which took a bankruptcy filing "completely off the table" and enabled it to extend its "financial runway." 

The company also said it raised an additional $304.8 million by selling shares, while Silver Lake and other creditors decided to convert debt holdings to equity in a transaction expected to reduce AMC’s obligations by $600 million.

As a result, AMC raised more than $1.1 billion in five days.

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