Amazon is Considering Acquiring AMC Entertainment

Amazon (NASDAQ:AMZN) is considering buying AMC Entertainment (NYSE:AMC) according to Amazon Insiders, per Intersect.

AMC stock rose more than +16% on the news before getting halted.

The thinking is that Amazon can use AMC’s theatres as “marketing weigh stations,” said one Amazon insider.

This would be used for promoting Amazon Prime movies for awards contention, cross-selling services such as grocery delivery, serving as local distribution hubs, and collecting crucial data from AMC’s annual 200 million moviegoing customers.

“It would also throw a lifeline to AMC, the world’s largest theater chain whose financials were torpedoed by the COVID pandemic chased by Hollywood’s cut-throat pivot to their own streaming services. The cinema chain – whose stock traded a year ago at $34 and now languishes at about $4 – can be scooped up cheaply (and without a major premium) for just a few billion dollars,” says Intersect.

“The discussions inside Amazon’s headquarters in Seattle and entertainment offices in Los Angeles are fluid, and there is no certainty that the retail giant will even make an offer.

One insider told The Intersect that Bezos may just bide his time should AMC’s stock continue to erode, or even pounce on AMC assets if the company buckles into bankruptcy — a strategy reminiscent of British banking giant Barclays’ takeover of Lehman Bros. during the financial crisis.”

Amazon AMC Acquisition Rumor

Sources say Adam Aron responded to a text message late Monday evening with “we do not reply to rumors and speculation.”

Amazon did not immediately reply to several email inquiries seeking comment.

Intersect says these are internal discussions being held inside Amazon and no official offer has been made from either party.

Still, many investors over the years have speculated an offer would one day be brought to the table.

If Amazon acquired AMC Entertainment, it would boost the company’s market cap substantially, more than likely squeezing short sellers from this acquisition.

Would this be a gamechanger for AMC Entertainment?

I’d love to hear your thoughts on this in the comment section down below.

Source(s): Intersect.

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