On Wednesday AMC shares surged over 20% following the announcement that AMC Entrainment (NYSE:AMC), the movie theatre company will stop showing ComcastCorporation (NASDAQ:CMCSA) owned Universal Studios’ movies.
AMC to stop Universal Studio movies
This came after Jeff Shell the NBCUniversal CEO suggested that Comcast is pursuing a direct-to-consumer model of delivery for its movies. Shell indicated on Tuesday that the outcome for “Trolls World Tour” surpassed expectations and showed PVOD’s viability. He added that once theatres open they will have their movies in the two formats.
These comments didn’t auger well with Adam Aron the CEO of AMC who reiterated that the company will not be showing Universal movies anymore at its theatres. He added that the change of model by Universal is a downside to AMC and therefore it is unacceptable.
AMC is in a precarious situation because of other studios will go then Universal ways then theatres will suffer. Therefore it is sensible that investors were upbeat about the decision of Aron to challenge the plans to start streaming movies. Interestingly the rally of AMC stock could be short-lived as moviemakers yield more negotiating power and it is unlikely AMC will win the war.
AMC to delay filing Q1 financial report
In other developments, AMC has indicated that it will delay the filing of first-quarter results until June because of uncertainty caused by the coronavirus outbreak that has left its theatres closed. AMC is the first entertainment t company to take advantage of SEC’s relaxed restrictions on the filing of reports considering getting information where most businesses are closed can be quite challenging.
The company indicated that the pandemic had disrupted its operations which include suspending of theatre operations globally that have resulted in cessation of all revenues. Most of its employees have been fully or temporarily furloughed which affects resources available to prepare filings. The company will file its proxy statement before June 15th and release the Q1 earnings report before June 24th.
AMC stock has soared over 150% since mid-April, but still down 33% from February’s peak price.