Amazon is reportedly considering buying AMC Entertainment and its nationwide cinema chain as a means Promotion of Amazon content and other services.
The Intersect reported that Amazon founder Jeff Bezos has tasked his team of investment advisors and entertainment chiefs with reviewing plans to acquire AMC and its chain of nearly 600 theaters in North America, Europe and the Middle East.
An Amazon insider, quoted in the report by The Intersect, explained that the e-commerce giant views a potential acquisition of AMC as a way to get stationary “marketing cradle stations” that could be used to promote Amazon Prime -Movies in addition to cross-selling other Amazon services through the distribution centers.
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AMC is the world’s largest chain of movie theater however, has struggled to regain its financial footing in the wake of the COVID pandemic, which brought with it restrictions that at times limited in-person audiences in theaters. While those restrictions have largely been lifted, the onset of inflation has made it harder for families struggling with rising costs to go to the movies.
The Intersect stressed that discussions were fluid and it was unclear if Amazon would make an offer to buy the world’s largest theater chain. The outlet reported that Bezos could wait until AMC’s stock goes down or until the troubled company goes bankrupt can be purchased at a discount.
Charles Gasparino of FOX Business confirmed the Amazon “Had long thought about a possible purchase” from AMC, but “didn’t pull the trigger for various reasons.” He added that Amazon is primarily interested in the potential of buying AMC as a “distressed asset” and that no deal is on the table and may never be.
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AMC became a prominent “meme” stock in recent years, as small investors banded together to boost the ailing entertainment company’s share price. AMC’s valuation peaked at over $23 billion amid the Reddit-driven surge in June 2021, when the price touched $59 per share.
AMC Entertainment Stock Soared Over 13% in trading Tuesday after the report and closed at $5.15 per share with a market capitalization of approximately $2.67 billion. The stock last traded above $20 a share in August 2022 but has plummeted and has been below $10 a share since September.
Amazon declined to comment on the reports. AMC did not respond to a request for comment.
Reuters contributed to this report.
Source : finance.yahoo.com