AMC stock alert: Is Amazon about to buy AMC?
There’s not many things that could save AMC Entertainment (NYSE:CMA). But the broken-down movie theater chain may have just encountered one. Specifically, AMC stock rose this afternoon on reports that Amazon (NASDAQ:AMZN) is considering a deal with the company.
This troubled meme stock has seen some growth over the past week, with rising borrowing fees keeping investors focused on a short squeeze. Today, however, AMC stock also saw real growth on speculation about the Amazon acquisition.
Currently, Amazon management is said to have only “explored[d] acquisition projects. Still, that was enough to have many investors buzzing with anticipation.
What’s going on with AMC shares?
Today, AMC stock closed the day up around 13%. Although stocks lost some momentum, today still marks the stock’s biggest one-day gain for the month.
That said, it’s important for investors to note that the force that drove stocks higher this afternoon is still pure speculation. The intersection reports that “several senior sources” close to Amazon have confirmed that Jeff Bezos has deployed his investment advisers to explore options for a potential acquisition. By The intersection:
“The idea is that Amazon can use AMC’s nearly 600 theaters in North America, Europe and the Middle East as ‘marketing weigh stations,'” an Amazon insider said. promote Amazon Prime movies for rewards, cross-sell services like grocery delivery, serve as local fulfillment centers and collect crucial data from AMC’s 200 million annual customers.
By that logic, the deal makes a lot of sense for Amazon. And for a company as unstable as AMC, a takeover may be the best-case scenario.
Still, no word has come from AMC management on the potential deal. CEO Adam Aron, who uses Twitter frequently, has remained silent on the issue. The intersection notes, however, that Amazon has yet to submit an offer to Aron’s team.
It may be premature for investors to rejoice. But if the two companies enter negotiations, it will likely push AMC’s stock higher in the near term.
On Penny Stocks and Low Volume Stocks:With rare exceptions, InvestorPlace does not publish reviews of companies with a market cap of less than $100 million or trading fewer than 100,000 shares per day. This is because these “penny stocks” are often the playground of scammers and market manipulators. If we ever post commentary on a low-volume stock that could be affected by our commentary, we require the editors of InvestorPlace.com to disclose that fact and warn readers of the risks.
Learn more: Penny Stocks – How To Profit Without Getting Scammed
At the date of publication, Samuel O’Brient held (neither directly nor indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com publishing guidelines.