Today, AMC Entertainment Holdings, Inc. is known as one of the hottest stocks in the market, beloved by meme traders. But the company’s origins are decidedly more humble.
AMC was founded by Edward Durwood, a vaudeville performer. After his group disbanded, he bought a theater in Kansas City.
The year was 1920. Durwood was determined to enter the nascent movie business.
The tiny company grew, and in the postwar era, AMC created the first multiplexes. It was even first to offer reclining seats with cup holders, now de rigueur at theaters everywhere.
I was fascinated to learn of this history while digging into the Wall Street Journal’s weekend feature on AMC.
What struck me most was the company’s history of innovation. And AMC continues to innovate today, despite the headwinds it faces from high rents and substantial debt.
Much like Durwood entering the movie business at its beginning, AMC is taking advantage of new trends like cryptocurrencies and the popularity of the UFC. It is the only theater to accept crypto payments or screen the sought-after fights.
I think AMC’s best chance for a strong future lies in embracing and doubling down on that history of innovation. Here are some moves for them to consider:
1) Sell non-fungible tokens (NFT’s), rather than just giving them away as promotional items.
AMC has a powerful meme trader following. That group has substantial overlap with the crypto community.
AMC could also split the proceeds with the owner of the IP (such as Disney), a win-win proposition.
2) Screen Netflix content. Many Netflix subscribers would probably like to see their favorite movies and shows on the big screen.
But aside from a few very limited releases, customers are generally out of luck. This could be a huge source of exciting new content for AMC.
Meanwhile, Netflix gets to partner with a company that has more screens than any other.
3) Offer more extensive food and even alcohol.
Many upscale theaters offer restaurant-style meals, providing a major source of new revenue. Why stop with popcorn?
Alcohol could also be a massive new revenue stream with very high margins and less equipment needed than a restaurant. Licensing will be an issue, but other theaters have done this successfully.
Here’s hoping AMC will continue to innovate for another 100 years!
P.S. My one bone to pick with the WSJ article is its contention that there is no evidence of naked short selling. Persistent, large fails to deliver fly in the face of that claim, although they have moderated recently.
More on markets:
Hedge Fund Paid Researcher to Write Misleading Reports on Seeking Alpha
Ken Griffin to Spend $300 Million to Defeat Governor
How Did High Dividend Stocks Perform In the Last Crash?
If you found this post interesting, please share it on Twitter/Facebook/etc. using the buttons at the bottom of the page. This helps more people find the blog!
Save Money on Stuff I Use:
Amazon Business American Express Card
You already shop on Amazon. Why not save $100?
If you’re approved for this card, you get a $100 Amazon gift card. You also get up to 5% back on Amazon and Whole Foods purchases, 2% on restaurants/gas stations/cell phone bills, and 1% everywhere else.
Best of all: No fee!
This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 and returns have been good so far. More on Fundrise in this post.
If you decide to invest in Fundrise, you can use this link to get your management fees waived for 90 days. With their 1% management fee, this could save you $250 on a $100,000 account.
My wife and I have gotten organic produce shipped to our house by Misfits for over a year. It’s never once disappointed me. Every fruit and vegetable is super fresh and packed with flavor. I thought radishes were cold, tasteless little lumps at salad bars until I tried theirs! They’re peppery, colorful and crunchy! I wrote a detailed review of Misfits here.
Use this link to sign up and you’ll save $10 on your first order.
Tremendous 