AMC Entertainment (AMC) - Get Free Report shares surged higher Tuesday after the movie theatre chain posted a narrower-than-expected second quarter loss and hinted at a possible partnership with fellow meme stock GameStop (GME) - Get Free Report.
AMC CEO Adam Aron suggested the GameStop connection in a conference call with investors that laid out a host of initiatives, including the an exclusive agreement to show Warner Brothers films, am and plans to accept payment in bitcoin by the end of the year.
Aron also suggested the group could return to the black in the fourth quarter, thanks in part to the same themes that drove the second quarter recovery: increased film attendance, rising average ticket prices, soaring food and beverage sales and an improving company balance sheet.
"Many of our new individual investors have showered us with great ideas about how we can strengthen and brighten the future of AMC," Aron told investors on a conference call late Monday. "Among their ideas for AMC are that we show concert movies, professional sporting events, e-sports, and gaming events. Wasting no time, we've immediately started to implement on these very good ideas."
"As for gaming opportunity, indeed, the President of Epic Games is a member of the AMC Board of Directors," Aron said. "And I cannot even count the number of times already that our shareholders have asked us to reach out and partner with GameStop. We're on the case."
AMC shares were marked 4.4% higher in early trading Tuesday to change hands at $35.30 each. GameStop shares, meanwhile, jumped 1% to $162.65 each.
AMC's loss for the three months ending in June was pegged at 71 cents per share as revenues rebound by nearly 2,300% from last year to $444.7 million as theatres re-opened in the wake of the coronavirus pandemic.
The headline loss was 20 cents inside the Street consensus forecast and up from a loss of $5.38 per share over the same period last year. Revenues beat the Street by around $62 million.
Aron also noted the group ended the quarter with just over $2 billion in total liquidity on its balance sheet, with around $1.8 billion of that comprised of unrestricted cash, thanks to share sales executed earlier in the year.