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AMC IPO Coming Soon – And Investors Should Watch

The company will likely hit the market on Wednesday.


AMC Entertainment IPO plans will mark the last public offering for 2013.

The company, which plans to launch its deal on Wednesday, expects to price 18.4 million shares at a range of $18 to $20 each. The lead underwriters of the AMC IPO include Citi (C), BofA Merrill Lynch (BAC), Barclays (BCS) and Credit Suisse (CS). AMC also plans to list on the NYSE under the ticker of “AMC.”

Founded in 1920, the company operates 348 theaters, which include nearly 5,000 screens. In all, the company has about 18% share of the U.S. market and about 40% of the population is within 10 miles of an AMC theater.

For the most part, the business has seen fairly steady growth. But to juice things up, the movie stock has been busy with some savvy efforts in advance of the AMC IPO:

Comfort: The company has been rolling out plush, powered chairs. They certainly make the movie-watching experience much better. But the chairs have also proven to be effective in getting more customers.

Enhanced food and beverage: The proverbial dinner-and-a-movie concept is different at AMC. The company has been installing in-theatre restaurants and bars. There are also some locations that offer in-seat food service.

Premium Site and Sound: Such things are critical. To this end, AMC has invested heavily in innovations like IMAX (IMAX), ETX and digital technologies.

Marketing: AMC is no longer a stuffy operator. Over the past couple years, the company has adopted a social media strategy, such as with Facebook (FB) and Twitter (TWTR), and also has its own mobile apps to connect with consumers.

Loyalty Program: It’s called Stubs and has been an effective way to help provide more targeted offers and marketing opportunities.

For the most part, AMC has been finding ways to get a bigger share of the wallet — and it seems to be working. During the past year, revenues came to $2.7 billion and the adjusted EBITDA was a juicy $450 million.

But going into 2014, there should be continued benefits from the company’s initiatives. It will also help that the upcoming slate of movies look promising, which will include franchises like Spiderman.

Finally, AMC has provided another twist: Stub members will have the right to buy up to $2,500 of the company’s shares in the IPO, without even having to pay fees or commissions.

In the IPO world, this is a pretty unusual move.  But it is definitely a nice gesture to help encourage customer loyalty.

Tom Taulli runs the InvestorPlace blog IPO Playbook. He is also the author of High-Profit IPO StrategiesAll About Commodities and All About Short Selling. Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.

Article printed from InvestorPlace Media,

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